eb teas 


stecee 


TS 
Sata resass 
See ETS 


eeReg ates Saat 
res 


poeeaa ERE 
STEELS 
earner anee ys ro 


ome 


ates. 


UC SOUTHERN REGIONAL LIBRARY FACILITY 


WANQAVNII 


Qooorroorr * 


REPORT 
of the 
STATE OF WASHINGTON 


TAX INVESTIGATION COMMITTEE 


Appointed by 


The Governor, Louis F,. Hart, 


By virtue of Chapter 171 of the 


Session Laws of the 


State of Washington, 


1921. 


THOQTEA 
eit to 


WOTSuIHGAW GO GTATS 


SUTTIMNOD UOLTADITERVUL XAT 


yd bsinioqos 
.JtTSH .-2 elvol ,tomtevoed sAT 
eit to ITI tetqesdO to susgaiv ya 
et to awal sioiaae2e 


notgnitdesW te stste 
> f 
a c fa 19 Se 
eL8eL 
/O- %-6Y 


y 


1. 


The Act providing for the investigation 
of taxation. 


(Session Laws, 1921. Chapter 171. S.B.204) 


INVESTIGATION OF TAXATION, 


An Act authorizing the Governor to investigate 
the subject of taxation and to employ assistance in mak- 
ing such investigation, and making an appropriation there- 
for. 


WHEREAS, real property and tangible personal 
property are now bearing the entire burden of taxation; 
and 


WHEREAS, this class of property cannot be any 
more burdened without confiscation; and 


WHEREAS, it is necessary that some steps be 
taken to bring about a more equitable and fair distri- 
bution of the burdens of government as related to rais- 
ing of revenues; 


BE IT BNACTED by the Legislature of the State 
of Washington: 


GOVERNOR AUTHORIZED 
TO MAKE: 


Section l. That the Governor of the State 
of Washington be, and he is hereby empowered to take 
such steps as he shall deem necessary to properly in- 
vestigate the entire mbject of taxation. 


of 


nolisgitesvat sit tot gntbitvorq sodA oT 
enoltsxst to 


(bOS.8.8 .I0L retgedd .IS@L ,aws. moteeee) 


-MOLTTAXAT GO MOTTADITAXVUL 


etsgiteavnt ot xomisvon ent gatsitodius toA mA 
-isn ai eonstatees yolqme ot bas nolisxat to tostdue ot 
-e1dt molsstigotqgs m8 giivsem bas ,notisgiteevrt dove ant 
«tot 


isnoetsq efdignst bns yiteqotq [sst ,caAcHaAw 
smottexst to nebiyd saitae edt anitasd won sis ysuisqoig 
bras 


yns od tomnso ytxreqotaq to eeaslo aid? ,2aAuAHanW 
bas ;mottsoatinoo tuodttw benobtud stom 


ed agqota emoe tant yiseeecen el si ,2ARHUW 
-titetb ttst bas eldstiups stom s gyods ynixnd ot nmeast 
-efeat o¢ bots{et as tnommisvon To ensbiud sft to notiud 
,aeunevet To gai 


stste odt to etutsletssc eds yd GETOAMH TI Ge 
smotantdesW to 


I FOVUARGVOD 


7SAAM O 

etess2 ont to tomrsvon ont tent of moitoss 
exist os hberswogms ydeted ak of bas .80 motezmidesW to 
-ni yLteqotq ot yiseeeoon meeb Ifsde orf es agate dove 
oltsxst to fostdm ertine ont otsgiteaer 


26 


ASSISTANTS; 

Section 2. That he shall employ such expert 
assistants as he may deem necessary to make a thorough 
and comprehensive investigation of the entire subject 
of taxation. 


REPORT: 

Section 3. That he shall make and publish 
a report of his findings and recommendations regarding 
the subject of taxation at least six months before the 
meeting of the next Legislature, and file his report 
with the Legislature for its information. 


APPROPRIATION 
$20,000.00; 

Section 4. There is hereby appropriated from 
the general fund to the Governor of the State of Washington 
the sum of Twenty Thousand Dollars ($20,000.00) or so 
much thereof as may be necessary to be expended upon his 
personal voucher to pay the expenses of said investigation. 


Passed by Senate March 1, 1921. 
Passed by House March 8, 1921. 


Approved by the Governor March 21, 1921. 


a) 


ERTUATEIESA 

txeqxs dove yolqme If{sde or tsXT ° otto 
dauvorondt s eilsm ot yiseesoon meob yem off as atnsteteaas 
soetdue sritne sit to notisgiteoevnt eviansderqmoo bas 
enmottsxst to 


THOTT 

Metidug bis ofsm L[isde of tsdT ~& mottos 
aoibtsast enottsbmenmooot Das agntbnrt ein To ttoqex s 
edt etoted antnom xte tesel ts moitsxet to toojdue ot 
grogex etd slit bas ,stussletged txen odt to gniteoom 
eMottsmrotni eti tot omptsletped ods dtiw 


boat bt Ost 


mott betskLiqotqgs ydetedm at ersdT o£ noistose 
gnotgnidesW to stste efit to tonisvond edt ot bnvt Isiensg orit 
ce to (00,000,0S¢) atslfod bneevotT ytnewT to owe ent 
eid nogs bebneaxs ed of yiseefsoen od yen es tosredt coum 
efoitsgtteovnt bise to esensqxs oft ysq ot teslouov Isnoeteg 


-LS@f .{f dorsi stane2 vd beseast 
-{[S@I ,8 dorsi! eesoH yd beaest 


-fS@f ,{[S dorsM tomrovod sit yd bevorqgA 


3. 


Pursuant to the above resolution, the Governor 
addressed a communication dated June 17, 1921, to the 
following named citizens of the State of Washington, 
requesting them to act as a committee to investigate the 
tax system of the state and report to him a sufficient 
time in advance of July first to permit him to make the 
report required under the Act providing for the investi- 
gation: 

Nathan Eckstein, Seattle 

D. We. Twohy, Spokane 

Alex Polson, Hoquiam 

George M. Elliott, Tacoma 
Frank D. Oakley, Tacoma 

W. We Robertson, Yakima 

Peter McGregor, Hooper 

S. Be Le Penrose, Walla Walla 
Robert H. Harlin, Seattle. 


CHAPTER I. 


ORGANIZATION OF COMMITTEE. 


On Wednesday, July 13, 1921, the persons 


named met with the Governor in Seattle for the purpose 


2 


tomtovon odd ,moitufoes2 evods eft of Snswetw | 
eat of ,ISOL ,.SL. smut batsb aise thaaees beeseoetbbhs 
~totygninesW to stste orit $e aneaisto bers gabwollot 
edt stisgiteevnai of eotiimmoo s es toa ot mont anittesupet 
taetoitive s mid ot groqex bus osate oft ‘to mosevye tes 
od} -coviam-qt mbhadiarag ot d62s% YLint to somsvbs nb omit 
~ttesvat edt sot gotbiverq toA ond tebay nethages droge 
snotisa 
elites ,nietexto£ asdtsii 
ensioga .wiowl .W cd 
meiup oH toe l oF Secs: 
smoosT tt obLlZ eM 8B 1090 
emoosT ,yetisO .d Anext 
sminasyY ,coettedoh wW .V 
TOCOoH ,TORStHoll xstet 
SlisW slisW ,ssotmmss Ll of 68 
sftsse2e ,mifisH .H t1edof 


~<_ AaTIAHO 


» LHTTIMMOO LO VOTTASTMADAO 


anoatsq aft ,{SCf ,éf vyint .yeheendeW no 


Seoqivg slit tot ofstseea ak tontevod oft dtiw tem bemsn 


of organization. 

The Governor called the meeting to order, 
stated its purpose, and requested the committee to 
select a chairman and secretary. Mr. Frank D. Oakley 
was elected temporary secretary. Mr. Eckstein of 
Seattle was elected chairman. He was instructed to 
maintain the office of the committee in Seattle. 

Reeves Aylmore, Jr., of Seattle, was elected permanent 
secretary of the committee, 

The only other business transacted at this 
meeting was that of fixing dates for future meetings and 
giving instructions to the chairman to secure and equip 
an office and engage clerical help. It was decided to 
hold regular meetings of the committee on the second 


Monday of each month, 
PUBLIC MEETINGS. 


The committee decided to hold public meetings 
in all of the principal parts of the state, and to extend 
to every taxpayer and to those interested in taxation, 
an invitation to express their views concerning the 
changes to be made in the tax laws. Twelve public 


meetings were held at; Seattle, Tacoma, Aberdeen, 


TS 


enoltestasy1o to 

.t9bt0 ot anitesm ont boliso tomrsvoed eAT 
ot sottimmos ot beteoupst bas ,seoqiue att betste 
yetasO .d@ Ansett .w2 |e ytstetose base nasorisdo s tosfoe 
to mfotaxioy .m eVtetetosse yrstegmet betoels esw 
ot betoutseant saw SH easmiisnio batoels esw sitisee 
-sftisee ni ssttinmoo sot To soltto st nistntam 
tnonsorteg betoeis esw ,silttse2 to ..tl ,stomiyA soveon 
esstsimmoo edt to yrstersee 

efdt ts betosensid aaontesd tedte yino eaT 
bas egnitsem siytut tot estseb gnixit to tent esaw gnitsom 
qiups bas etyose of msmzisdo edt ot amoisout¢ent gutvis 
ot bebtoob asw sI eqied Isolarslo exsano bus solttio nas 
broose ent no settimmoo edt to agniitsem asiugex bLlod 


efitnom doss to ysbaol 


egnitoom ofiduq bLod ot bobiosh sottinmoo oT 
bnetxe ot bas ,stste sit to etitsgq Isqtontzq ont to Ifs nt 
etotisxst ni betestetni saait ot bas zsysqxst yreve o¢ 
eat guiimisonco ewetv tient eesirqxo ot moltstivni ne 
ofiduq sviowT eawsl xsi ot ai ebsm sd ot eopnsno 


wMoeebtodA .,smoosT .slttsee”a :ts bied srew agniteoom 


Se 


Chehalis, Vancouver (Washington), Yakima and Spokane. 
Certain dates were set for the lumber interests, the 
railroads, real estate owners, farmers, and fruit growers, 
and at these meetings an effort was made, with satisfac- 
tory results, to have every interest in the state repre- 
sented, Chambers of commerce and other organizations 
were invited to send representatives to discuss the 
subject of taxation and to recommend changes that would 
bring relief, 

These meetings were well attended and much inter- 
est was shown in the subject, In the earlier meetings 
an attempt was made to hold the speakers to the subject 
of changes in the law needed to make the distribution of 
the tax burden more equitable and relieve real property 
and tangible personal property. This plan had to be aban- 
doned, as only a few people had suggestions to offer, but 
all wanted to speak on the general subject of "Too much 
money being spent by the taxing bodies in the state," 

At meetings held in the farming and fruit grow- 
ing districts it was frequently asserted that the farmer 
cannot rent his farm to a tenant for enough to pay the 


taxes on the land, and that if the tax burden becomes 


oc 


.ensxoge bans sutasY ,.(metpnidesW) tovucoonsV ,eltlsriedd 
edt ,atestotat redmul ont tot toe stsw astsh abetted 
~etowory ¢iutt bus ,etenmist ,eitemwo states {set ,ebso1list 
-ostaitse séiw ,ebsm asw siotts as apatioem oaent ts bas 
-etqet otsse ont ai gacstetni ytevse evad ot ,edivuest ytot 
anctissiasgito teste bis Sotenutos to atodmedd ebetuse 
edt eavoelb ot eeviistnessiget base ot botivet xem 
binow tect eogmsdmo bnemmoost of bus neitsxst to tootdus 
erei{sx uatrd 

-rstat doum buns hebnetis Ifow stew eanitoom saedT 
egnitesm tetizss ends al etosjdue ont ak mwore esw seo 
tootdue ont of etenlsoce soit dlod ot sbam esw tqmotis os 
to nottudtutetbh eft oem ot Boboen wal oct nt asgasco to 
ysiteqota Iset evetier bms elfdstiupe etom mebtud xet ont 
enmeds ed ot bel asiq einT evsteqotc Isnoetsq uti tinue’ brs 
gud .retto of amoisessaue bsi elqooc wot s yino ee ,beriob 
sloum ooT" to tootdve Letemeg ot mo assqe ot Sotnsw Ils 
".etstea oft ni astbod anixst ont yd tnege snied ysenom 

-wotg tiurt bns gotmist oft at Slo epgniteoom tA 
tomist ent tant betreees Yitneupott esw sti atotitetbh auat 
ent vseq ot dguone tot tasnot s o¢ mist eid dnet tonmso 


esmoosd mebiud xst sat tir tsdt bas ,.basi srlt mo esxst 


6. 


heavier farming and stock raising will cease to exist in 
the state. 

The principal speakers at the meetings in the 
cities came as representatives of the associations of 
real estate brokers rather than as the owners of real estate. 
The small home owner was conspicuous by his absence, The 
committee held two public meetings for the purpose of hear- 
ing from owners of real estate, but only a few owners ap- 
peared, and their concern was not in a changed system of 
taxation, but in some plan to stop the local taxing bodies 
from proceeding with the expenditure of public funds over 
the protest of the owners of the property that carries 
the load. 

At several of the meetings papers were read 
which showed that the several organizations of business 
and labor in the state were willing to, and did, study 
the subject with the idea of helping to bring about some 
beneficial change. These papers are bound in a separate 
volume accompanying this report. 

It was not deemed advisable to have a detailed 
stenographic report of the proceedings of the meetings. 


The stenographer was accordingly instructed to secure the 


i) 


ot tetxe ot sesoo [fiw gntets1 woote bus gntmarst a<oivsent 
eStste ot 
ect mk epgnitoom sat cs atowseqe Isqtonitgq odT ey 

to anoitstooees st to esvitetnsesigqget es omso estifo 
.ststae Iset to atomwo ont as asdt todts1r airsiaoid states {sot 
oaT .conseds aim yd avouoigenoo eaw temwo smom L[f{sme oAT 
etseni to seoqiyg oft Tot agniteom off{duq owt biod oo3é tame 
-qs etenwo wot s Ylno sud ,otstes Iset to atenwo wort ant 
to meseye bognsdo s ai tom esw misomoo ifedt bas ,beissq 
asibod gnixst Isool orit qose ot asig smoe nt ced olisxss 
tsvo abaut ofidsq to stuttbnsqzxs oft ditw ack boeb owe mort 
esizriso tsht ytreqoia srt to arsnwo eis to sastorg ont 
 baot edt 

beet stew eteqsaq ennitsom sat to Istevsee ta 
eesntayd to anoltsstnsagto Isitsvee ott tect bewode dotdw 
ybute ,bib bne2 .ot gnititw stew etste ont al cedar han 
emtoe tuyods gnitd ot anigfod to sebt ont dtiw dnatdue ort 
eistsqee s nt bmauod ots atsaqsq seeiT .eznsio I[stottoned 
ettogqet eit Se pscon emul ov 

beLlisteh s ovsd ot ofdseivbs bemesh ton esw $I 
-egiitoom oft to agnibesootq edt to trogez oldqsig0nete 


emt stusea ot betouttent yYlantbtosos esw xusdqetgonste sd? 


mame of each speaker, follow his remarks, and take down 
only such statements as related to taxation questions. 
The record of each meeting is separately kept and copies 
of the papers read at each meeting are attached to the 
record. 

A reading of the record of these meetings will 
convince the reader of one thing, at least - that many 
people feel that the state is suffering from too much 
government, The committee suggests to the Governor the 
advisability of publishing an outline statement in simple 
form showing all of the divisions of government, organiz- 
ing it in such a manner as to present the demands of gov- 
ernment for state, county, city and district, pointing 
out the numerous inspections, their cost, and the good de- 
rived. The people do not know what they are getting for 
their tax dollar, If they knew they could better advise their 
representatives in the legislature, 

Another thing is disclosed by the record: Prop- 
erty is not equitably assessed. This fact is known by 
many property owners from personal experience and in every 
meeting much time was used in calling the committee's at- 


tention to these inequalities and in presenting proof of 


mwob exst bos ,sxtsemex etn wollot ,texseqe dose to omen 
-anoitesup moitsxst ot botsiet as esnomsisse tloue vino 
estgoo bus tgqex yLlotetsqoe ai gnisoem dose to bicost oT 
edt o¢ boslostis ots giitesm moss ts bset sisqeq eft to 
«Ht0908tT 

Iliw agaiteem seont to brooet odd to gnthbset A 
ynsm tsdt - tesel te .gnict emo to itsbser ot sontvaoo 
doum oot mort aniistive ai stste ont tent Iset siqoeg 
eit tontevod et o¢ etaongue ssttinmoo sAT tasmnrrsvoy 
elquiea ni tnemetste entitvo as anidetidsu¢ to ytilidseivbs 
wales ,tnemmtevog Io enoteivib edt to ffs gulwode miot 
-voy to ebnsmeb oft tneesiq ot es tonnsam s dove mi tt ant 
guitniog ,tgoittelb bus ytio ,yinuoo ,siste tot snomnte 
-9b boog oft buns ,tso0o tisdt ,erottooqani avotenmn sdt tuo 
tot gnistog ots yedt tecdw woml tom ob eigoeq sAT »bevit 
atedt ssivbs 1e¢ted bivoo yer wenx yest tI .tellob xst thedt 
eotuteletgetl odd nt aevitsetneeorqet 

-qorl :brooor oot yd beaeLoetb et gnidt rzonsonA 
yd swonwd ef tost efit ~bheeasceaes eidatiupe ton al ytus 
yteve at buns soneiieqxes Isnoetsg mort atenwo yiisqetq yasm 
«ts a'settimmoo ont aniftso at bees esw omit doum gnitsoom 


to tootg yniinsesiq at bus eetti{supent ecsrt of nolinses 


8. 


assessments varying from twenty to a hundred seventy-five 
and two hundred per cent. 

The meeting of January 30th and 3lst, held in 
Seattle, was of particular importance, Oregon has a come 
mittee appointed to do the same work for that state that 
this committee is doing for the Governor. At this time 
the majority of the Oregon committee, namely, Mr. I. N. 
Day, Chairman, Mr. Coe A. McKenna, Secretary, Mr. Charles 
A. Brand, and Mr. Walter M. Pierce, met with the Washington 
comnittee,. A reading of the short report of this meeting 
is especially recommended, 

At this meeting, also, the preparation of our 
report was discussed. A study of the tax problems of 
other states and of the reports made by other committees 
of like character led the committee to feel that the re- 
port should be presented to a tax expert for final draft. 
It was unanimously decided to ask Dr. Harley L. Lutz, 
Professor of Economics in Oberlin College, and Editor 
of the Bulletin of the National Tax Association, to come 
to Seattle and, with the secretary, prepare the report, 
based upon the findings of the committee, and to include 
in the report the outlines of a model tax system for the 


State of Washington, based upon the plan proposed by the 


eviteytnevea bethasd s ot ytnows mort gaiyisv etnomercones 
| .tmeo teq botbnud ows bap 

nk bled ,seld bus AtOS yusuasl to gniteem oT 
emoo s esi sope1t0 e9onsttogqmi telvottisq to asw ,slitse2 
tadt etste tsdd tot Atow emse ons ob oF Hotntogqs setiin 
omits afidt cA etomisvod ont tot gntob at setiimmoo elds 
ei ol otil .YLomen ,oottinmoo noget0 ot to yYsixtopsm ont 
eolitsdd .2l .yrsterose ,snmezioM .A ©00 tll ,mamtisdd eed 
nosgnidesW ont diiw tom ,soretd .M totisW .t bre busta oA 
anitesm efdt to troget ¢tome edt to snibset A ests immoo 
| ebsbnemmooest yiletosqgas at 

myo to motistseqotg oft ,cale ,anitesm etdt JA 
to ameldorq xet oft to ybute A .boseeavoetb eaw t10oget 
essttinmoo tsifto yd sham etaogqst srt to bus eotste iasdte 
-91 oft tant Iost ot ssttimmoo odd bol atstostsenio exit to 
ettetbh Isntt rot steqxe xst s o¢ betnsestg od Hivorle t1og 
.Stinl cl yeltsH .10 owes ot Hbebtoob ylastominsay esw SI 
atotibH bne ,sgeLlfod atixedO nt eotmonook to x0eestord 
emoo ot ,mortsiooesA xsT isnoitsi st to miteLlue ost to 
eftoget ent stsqetq .yiIstetose ods dtiw ,bns elttsee of 
sbufloni ot bas ,gettinomoo ont to agnibnit ont noqu boasd 
edt tot metaye xst Lebom s To asniftuo oft Iroqet oft at 


eg yd beeeqotg nelq sdt noqu beasd .notanicesW Io otste 


96 


National Tax Association, adapted to the special needs of 
our state. 

Committee meetings were a heavy draft on the 
time of each of the members, Nevertheless, the meetings, 
with few exceptions, found all members in attendance. 
About the first of the year iir. De W. Twohy was made a 
western representative of the Federal Reserve Board, and 
his duties as such kept him from the committee meetings, 
but in order that he might be kept advised, his nephew, 
Mr, Edmund P. Twohy, at his request, attended the meetings 


in his behalf. 


SUMMUARY OF RECOMMENDATIONS AND SUGGESTIONS. 


For convenience the committee's findings and 
recommendations are summarized here. A more detailed 
discussion of these suggestions will be found in the 
body of the report. 

Bi i 
The establishment of a state tax commission of 


three members, to be appointed by the governor fora term 


o& 


to aboen Lstosge sdt ot bedqsbs ,noitskooaeA xsT. [snotisk 
eStss2 two 

edd mo ttath yveod s ov]ew eanttesm settinmod 
eapnitoem odd ,eeoledditevel .exodmem oft to Mose to omit 
oonsbhbustts nt ersdmem Ils bnwot ,enoliqeoxs wst Asiw 
& obsm esw vlowT .W df .ti ts0y ond To tenkti ont tyodA 
bas ,btsed syvxseeofl Iexshs% ont to evisstnsesage:r areteaow 
egnticom costimmoo st moti mid teed dove es eotiuh ain 
Wengen elt ,heetvhs tgeat ed toatm off tend tobhto mk sud 
agnitcom edt bebnests ,teoupet eid te ,ylowT .¢ bawmba . 1M 
tisded etd at 


. BOL TataovEe CiuA SVOLTACIEMMOOEE TO YAAMIUE 


Dos egnibati e'settinmoo ent sonsimevnaeo t0% 
beLlisteb otom-A -o1ed bosiissmue o18 enoitsbnommooet 
edt of bavot od {L[itw enoistzeszue seodt to noteavoetb 
ettogez oft to ybod 
ot. 
to mofeelamoo xst etete s to tusmfetidstes oAT 


miet s tot tomisvog ocit yd botnioggs od ot ,atedmem sexs 


10. 


of years and at sufficient salaries to attract high class 
men, and the thorough revision of our system of tax ad- 
ministration under the control of this tax commission. 
(p. 77) 
aa 
The introduction of assessment at full value, 
with proper safeguards against local extravagance during 
the transition. (p. 84) 
woe 
The development of a budget system for the state 
and of a plan of budget control over local spending dis- 
tricts including counties and municipalities, this control 
to be vested in the proposed state tax commission. (p. 94) 
=4a 
The most careful economy and efficiency in pub- 
lic expenditures on the part of the state, county and local 
officials. (pp. 19-31) 
TS 
The assessment of all public utilities by the 
proposed state tax commission. (p. 64) 
x 
The equalization of all assessments by the pro- 


posed state tax commission, and the abolition of the present 


OL 


easlo Agid tosrtts ct astisise tastotitue ts bas erssy re 
-bs xst to meseye tue to moletvet dayotods ent brs ten 
.Moteeinmoo xst eidd to Lorénoo edt tobmas mottetteiaim 
(TT .q) 
ale | 
eutsv [Iut ts tnomeasces to moitoubotint oft 
gotiub sonsssvsistxe Iscol tanieqs abrsupetes teqor¢ at tw 
(8 .q) .moktiensazt ot 
atm 
etste ons tot mesteye teybud s to tmemqoleveb oNT 
-etb gnibmeqe Iso0L tevo Lottmoo tonbud to msfc s to bas 
fotsnoo eidd ,esitil{sqioinum bas astinyoo gntbulont etotad 
(8@ .q) .moteetnmoo xst otete BSeeodotg ent nt betesy dd ot 
Jae 
-dug mi yonototite bas yaorooe {Iuistso teaom oAT 
fgool bas yinvoo ,ststa ont to tisq odd mo setusibnsgxe off 
(L&-CL .q¢q)  .alstoitto 
ae 
edd yd esitiiity otiduc If[s to tnomeesees oT 
(83 .q) .moteetmmoo xst etste boeoqotg 
=0= 
-otq ont yd atnemeeoareas [fs to noltsstieups oT 


tnsaetq oft to nolitifods oft buns ,moteetnmoo xst etete bseog 


ll. 


ex officio board of equalization. (pp. 78-84) 
Py ee 

Administration of the inheritance tax by the 

proposed state tax commission. (p. 86) 
Sine 

Increase of the filing fees and annual license 
taxes on corporations. (p. 113) 

en 

Increase of the tax.on fuel oil used in inter- 
nal combustion engines to three cents per gallon. (p. 129) 

«10. 

Increase of the fees charged by various county 
offices sufficient to make these offices self-sustaining. 
(p. 114) 

oe 

The establishment of a highway tribunal under 
the highway department for the purpose of securing more 
vigorous action against those who violate the highway 
lew: (p. 212) 

a 

Restriction of the personal exemption to house- 

hold goods and personal apparel. (p. 124) 
313~= 
More strict construction of the exemption of 


cemeteries. (p. 125) 


LL 


(8-89 .qq) .mottsstisups to bisod oLotite xe 
=e 
eit yd xet sonstizodnmt sat To soitsztetobsbha 
(88 .q) .mokeatsmoo xsi otsta boeogorg 
«aie 
eensoit L[sunans bus ssst gynfift oft to sasotonl 
(BLL .q) .amottsteqres mo eexet 
ve 
~totai ai boas [fo fout no xsd oft to sesoront 
(QSL .q) .moifsa tsq efaso soexdt ot esntgno soltaudmoo [sn 
-OL-= 
ytosoo aevolisy yd boprsio eeet odd Io sasotonl 
-gninistese-tise asolito seeds siism o¢ tnsioktive eeoitto 
(S£2. 6a) 
ek Se 
tebns Lanudixt yewigid s to tnomletidstes oT 
etom gniinvose to seogiue offs tot tnemsdisqed yswietin oct 
yswilgid oft etsLloiv onw seodt tenisss mottos avotogiv 
(Sl .q). «wat 
aGle 
-eauol ot mnoitqmexs Isnoeteq sit to nottotu«sacoh 
{8SL .q) .fersaqqs isncateg bus eboog blow 
nS Law 
to moltqmexe oft to mottourtanoo soizste oroli 


(6Sf .q) .astretemes 


12. 


=144 

Regulation of the maturity of bond issues in 
accord with the life of the improvement financed thereby. 
tw. 2eT) 

-15- 

Program of reforestation through tax adjustment. 
A constitutional amendment probably will be necessary to 
secure the full benefits of this program. (p. 117) 

-16- 

Extension of the jurisdiction of the department 
of public works to all motor vehicles using the highways, 
and the adjustment of the schedule of fees to a level that 
will make this division of the department self-sustaining. 
Consideration of a gross earnings tax on commercial motor 
vehicles when all have been brought under the jurisdiction 
of the department. (p. 111) 

-17- 

School Finance. (p. 88) 

-18- 

Discussion of the taxation of intangible property. 
(p. 133) 

-19= 


Memorial to Congress on the following subjects; 


SL 


wd Le 
mt esyeet pbnod to ytirutsm oft to nottslugon 
.yeredd beonentt tnemevorqut eft to stil edt Atiw brooos 
: (TSt .a) 
=OL~ 
wtnomtartbs xst Mdaworld mottsteototet to metg01g 
ot yrsesegoon od IfLtw vyidsdorq fnombaems Ismotsutitanos A 
(Y£Ll .q) .mergotc atdt to etttened [iut edt etuose 
-oLe- 
Snomtisqebh eft to moftotheiiu, edd to noLensixi 
.eyewigia oft antes esflotdevy totom [fs ot aaxtow oL{duq to 
gad? fovel s ot e99t to olubortoe ont to dmoatanibe ont bas 
earinisteure-tloe chemtisqeb oft to moleivib etdt oxen ILtw 
tod oni Ea pexenme mo xst againitse esots s to nottstobteaed 
mottotbeiiyt, edt rsbmy dilguotd mood oven Ifs nodw eaoLlotsdov 
(fff .q) .tnemttseqeh ont to 
=V[-= 
(88 .q) .9onentt Looted 
par ee 
eYtteqotq oldinnstmt to mottsxsd oft to soteevoeld 
. (SEL .a) 
-@f- 


:atostduye antwollot edt mo eeetgnod ot Isttomsi 


13. 


(a) Supporting the proposed amendment to U. S. 
Federal Statutes, Section 5219, relating to the taxation 
of national banks. (pp. 74-75) 

(b) Supporting the proposed amendment to the feder- 
al constitution to prevent further issues of tax-exempt 
securities. (pp. 152-160) 

(c) Urging the federal government to relinquish 
the inheritance tax for the use of the states. (p. 163) 

=20= 
Introduction of a gross earnings tax for tele- 
graph companies. (P. 71) 
=21- 
Centralized assessment. of the property of all 
public utilities by the proposed state tax commission. (pp.64-66) 
ina ieee 
Introduction of a mortgage recording tax of 
fifty cents on each $100, to apply to all mortgages in 
excess of $1500. (p. 116) 
a es 
Revision of the brackets. of the inheritance tax 


with a view to increasing the tax. (pp. 151-132) 


-2 .U ot tnombaems ban Goon eis anitrogqque (s) 
moitsxss eft of gnits{e1 ,@ISé noltos® ,eetustste Isrebet 
(ef-39 .cq) .exnad Isnottea to 
-i1ebst oft ot Snombnoms bseoqotg oft gaittrogqua (d) 
tqmexeexst to sevaat testiut taevetq ot nottustitenoo Is 
(O8L-S8L .qq) .acttiavose 
detupntis1 ot tnemnievog Istebet odt gntgrU (0) 
(68L .q) .eetsta ont to sew ort tot xet sonstictonnt ort 
=OS— 
-9fot stot xst agniniss esotag s to nottoubortal 
(LY .4) .eeknsqmoo Ags13 
-IS—= 
ffs to ytteqotaq st to taomecoaas pestiextned . 
SebS.qq) .moteetmmoo xst etste beeogotg sit yd eettifidw otidue 
“SSe 
to xed gnibtoos1t syegiirom s to nolttouborial 
mi esgsgttom ifs ot viqgqs of ,00L$ Mose no atneoo ytttt 
(@fL .q) .00@I¢ to easoxs 
~tS~= 
xet oonssitodni ont to atexosid sit to noteiver 


(SL-L6L .qq) xed ont gntesstont ot wetv s Mtiw 


14. 


=24- 
Removal of the county assessor from the county 


board of equalization, (p. 151) 


Chapter II. 


THE REVENUE AND EXPENDITURE 


SITUATION, 


The revenue problem which confronts the State 
of Washington is not one peculiar to this state alone. 
Every state in the Union is seeking, in one way or another, 
to meet satisfactorily the same problem. In some it is 
no doubt more acute than here. Everywhere the costs of 
government are rapidly mounting, end tax rates are rising 
to unprecedented levels. No fewer than eight states have 
recently created special committees of investigation sim- 
ilar to this one, 

In some respects the situation in Washington is 
quite different from that which prevails in the older 
states, or in those with markedly different economic char- 
acteristics. Potentially this state possesses vast wealth 
in lumber, minerals, fisheries and soil, mt these resources 


are as yet not fully developed. Their full development 


ol 


yinuoo ont mort toessaas yinwoo sedi to LIsvonon 


(f8f .q) .moltsstisups to bisod 


etst2 edt etnottsos Notdw meldotg sunmevet oAT 
~onols otste aidt of uwsif[voeq sno ton ef notgnidasY To 
.toitons to ysw emo nt ,anidesa al noftav odt at otste yisva 
aif tr oemoe aI emeldorq omea oft yLitotostetisa toom ot 
to eveoo sit otoswytevil -oten nsdt etuyos stom stdyob on 
antelt ots astst xst bus ,gaitnvom yiblast sis taomntovoeg 
eve aotsta tigie nat tewst of .alfsvel hotnebsoetqny ot 
emia motsagitsevnat to assstimmoo Isiosqe bstseto ylinsoot 
oto aint of tsft 

ai aotanisesW at mottsusia ont atooqast omoa al 
tobfo oft ni alisverq dotdw fsit mott tnstettid ettup 
-tedo ofmoneooe tnerettib yvibolrem dtiv seodt nt to ,astata 
djfsew tasv asazaceeog ststa eidt yiletines of -20ftatietos 
seoryoest seott tu .f[foa bus asitedett ,alstonim ,redmul at 


tnsemgolevehb Ifut tisnT -beqofeveb yilfwt ton sey as 91s 


15. 


must wait for population and capital. The state is in 
its infancy economically. It therefore lacks the immense 
reservoir of tax paying power to which older and more 
wealthy states have access. 

Nevertheless, in Washington we have been under 
the necessity of providing the agencies of organized govern- 
ment and of modern social organization on a comprehensive 
scale, Our school system extends to every corner of the 
state, and we have provided in many places facilities 
for the education of a few children which would be ad- 
equate to care for larger numbers at little or no addi- 
tional cost. We have covered the state with a magnif- 
icant system of arterial highways, hundreds of miles of 
which traverse sparcely settled districts. In various 
other ways we have been obliged, by the pressure of public 
opinion and drift of the times, to provide those government- 
al facilities which make most of the difference between 
pioneer conditions and comfortable modern life, and to do 
this for a relatively small population and on a relatively 
small basis of taxable wealth. The state and local finan- 
cial problems are at present serious, largely because of 
the gulf between the enormous physical territory to be 


served and the limited available taxable resources. The 


Cl 


ai ai siste oxnT efstigso Sas moltsingqog tot tisw tas 
ganommt sft eaxosl otroterods tI eYilsotmonoos yonstak att 
etom bus t9bf[o dotdw ot teswog aniysq xsi to rlovisasr 
2229998 ovsn astate yohilsow 

tobauy mesd ovsi ow nsotantdesW at ,acsisdttever 
@Nt9svog besinsato to aeftonsgs ont gutbhbivorg to ystaeesoen edt 
evienedetgqmoo 8 mo moltssinssto Istoos nrebom to bas tnom 
sit to rsntoo yreve ot abasixe moteya LIoofoa tw0 eefsoa 
setsif{iost esoslg yiem at bobivotg. sved ow bas ,otste 
-bs od biluow dotdw nertol{ido wet s to nottsoubs odt tot 
-fhbs on to olitil ts arodmun teogisil tot stso ot otsyupe 
-tingsm s dtiw stste edt bersvoo even oW et2eoo Isnols 
to aeflim to eborbaud ,eyswisid Istietts to metayea tusot 
avoizsv al eetoitsaib bolitoe yLlootsqa setevert doltslw 
osifduq to stvaeetq oft yd .beyifido nosd sved ow aysw testo 
-tnemitisvog; seods ebivotg of ,aemit sdt to ttith bas nointgo 
meswied sonetsttid oft to teom sism doltriw aettifiost La 
ob o¢ bas ,9tif£ nisbom sldsttrotmoo bas anoitstibnoo t99mo0lg 
Yfoevitsfor s no bas molés{uqog [fsme ylovitelet s tot atdt 
enmsnit fsool has sista oT edifsow olfdsxst to atasd I[f{sme 
to saysosd ylogisl ,avotise tnsesiq ts ors amefidoig Isto 
ed of yvtotitros Isoteydig evomrons soft asowted tluyuy os 


sniT e299tvo0sst sldsxst sidaeiisvs bostimil ont bas bevree 


16; 


tax duplicates of many cities in the East exceed the 
entire duplicate of the state, yet we are endeavoring to 
provide governmental services on a scale and of a quality 
comparable with the Hast, for an erea of 69,127 square 
miles. 

The act which created this committee indicated 
a definite problem to which an answer was to be sought. 
This problem is stated, in the terms of the enactment, as 
that of relieving real estate and tangible personal prop- 
erty of a part of the tax burden which these classes of 
property are now carrying. Your committee understands 
this to be, in other words, the problem of the more equi- 
table distribution of the tax burden. This problem may 
be approached from two angles, both of which have been 
given careful consideration: 

First; The more equitable distribution of the 
tax burden through improved administration and enforcement 
of existing tax laws. 

Second: A redistribution of the tax burden through 
the development of new sources of revenue. 

We have been unable, however, to confine our in- 
quiries wholly to this rather limited view of the state's 


revenue problem. We have realized that the tendency towards 


eit boeoxs tes® ong at eottto ynsm to sstsotiquh xst 
ot gattovssbnas ets ow tsy .siste oft to stsoliquh siitns 
ytifsup s to bns efsoa s no asotvrse LesSnomntevog ebiverq 
ersupe TSl,@d to sets as tot tes odd ott bw oldstsqmoo 
ool im 

betsoktbat settinomoo efdt betseto doidw sos odT 
etiguyos sd of asw teowens as doidw ot meldorg etiatted 8 
23 tromtosne ect to emist odt mt ,botste at meldorg aint 
-qotg Isnoeteq si[dignss bus etsses Iset gaivetfet to tsadt 
to eesasfo seeds dotdw nobhbiud xst ont To dtsq « to uste 
abastetobas sedtinmoo qwoY  .gniyrrss won ets utteqotg 
-fupo stom edt to mefdotq odt ,ebtow tonto ai ,od ot abd 
ysmt maidot: et?  .nobusd xet odd to noltudixteth efds¢ 
ased sever doidw to dtod ,asigns owt mort bodosotqgs od 
:moisstohbianoo Iutsiso pi 

odd to mottudixzteth sidstiups stom oAT stout 
Snomeototms bus motsetteinimbs bsvortgqmt dgvoidt nobtud xst 
eawsl xst gaitetxe to 
Masotit aesbtud xst oft to motinudittatbor A :bmoo9 

eSunNevSt To asotyoa wen to tnemgoLeveh ost 

efi tyo sattaos ot ,tevewol ,sidsnu nsed sven sW 
etetsta oft to wetv botimti renter efdt ot yilonmw astrtup 


abtswos yomnebass ott tsdt besif{soer svsdi ov emeldorg sunevet 


17. 


further increase in the outlays made by the state and 
local subdivisions is steady and more or less inevitable, 
so that the question of the future increase in the total 
revenue needs cannot be entirely avoided. The full con- 
sideration of the state's future revenue requirements 
would carry us far beyond the scope of the problem conm- 
mitted to us, and we have undertaken no forecast of these 
needs, nor have we deemed it proper to formulate -2 come 
plete revenue program to meet the public requirements for 
an indefinite time, A thorough study of this larger 
problem would require more time and more ample resources 
than were at our disposal. Farther on in this report 
will be found some suggestions which look toward the de- 
velopment of a model taxation system for the State of 
Washington. 

REVENUE NEEDS OF THE STATE 

AND LOCAL SUBDIVISIONS: 

The first angle of our problem is that of the 
revenue needs of the state and its local subdivisions, and 
the manner in which these needs are being met out of the 
existing revenues. 


ie State Exvenditures: 


The aggregate of taxes levied in the state for 
all purposes for the years 1910, 1915, 1920 and 1921 is 


bas otste oft yd sbem eys(tuo oft at sesetont tondtit 
.elidstivent esel to stom bas ybsste ai enats bebeitee fsool 
{stot ont nt sesotont orvtyt oft to mottacomp edt Isdt oe 
-roo [fwt oT .bobtovs yistisins od tonnmso ebsen OUMSVS% 
atmomeriupet sumesvert siusuTt e'otate odt To notistebta 
«moo mefdorq ort to sqooe ods Hbnoyed wet aw yrs. blyow 
seont to ascet0t on mousirsbay svat sw bis ,au od Sottim 
-moo s stsfumrot ot taqotq tf bemssb sw oven ton ,aboon 
tot udugem thank’ able edt toem of metzgoi1g sunsvet stolg 
zontal aid? to vbute Mguvotont A e omits etinttebat ms 
esotvoaeet slqms stom bas omtt stom situpst biyow moldoxg 
trtogez elit ai mo zsdtrst efsaogeth tuo ¢s otew nant 
th ons bxrswot wool ilo intw afloftaegaue smoa brusot ed ffiw 
to ststa oct rot metexe noitsxst Lebom s to tnusmqolev 
fotanidesW 
StATe HHT TO echan cave 
:e“Olalvid JAI0T 

ods to tsdt ait meldotq two to efgns serit oAT 
bas ,anofeaivibduye [soot ati bus stste oft to abeon sunsvoet 
eds to tyo tom gniod sts abeon sess so tefw ai tonnsm osit 
-e9unevet gititetizxs 

:gotuttbasdxt ststa o> 

tot stste ort at beivel asxst to stsgemag6 odT 


aft [SCL bus OSCL ,adf@L ,OL@L arsey edt tot aseoqusg [Is 


shown 


in. the. following summary table; 
TABLE I. 
TOTAL TAXES LEVIED FOR ALL PURPOSES IN 


18. 


1910 1915 1920 1921 

State General $1,925,000 $1,302,000 $5,407, 000 $2,669,000 
State Military 140,000 208 , 000 360,000 236,000 
State. Highways 916,0C0 1,588,000 3,004,000 2,966,000 
State Education- 

al 2,000,000 3,168,000 7,657,000 9,087,000 
State Capitol --- --- 598,900 589, 000 
Veterans Com- 

pensation --- --- --- 1,180,000 
County Total 4,785,000 10,275,000 . 16,249,000 16,468,000 
School Districts 4,693,000 7,276,000 17,213,000 16,289,000 
Ports & Parks --- --=-- --- 403,000 
City 7,034,000 8,822,000 14,107,000 13,412,000 
Road Districts 2,175,000 2,699,000 5,640, 000 4,102,000 
Various Local 

Districts 125,000 2,150,000 1,116,000 1,600,000 
Aggregate . 

Totals $27,085,000 $37, 488 000 $72,352,000 $68,001, 000 


These figures show that there has been a steady, 
and in recent years, a rapid increase in the levies for 


all purposes. The greater part of this increase has occurred 


8L 


:9fdst yitsamye gntwollot ont nmi aworie 


~-L ISAT 
Ul SH80GAUT GIA AOE GHIVEI SExAT ws 
Isesr oser BLer OLer 
90,206,8$ 000,70h,a$. .000,S08,1g  000,c8@,18 Lstened otste 
00 ,8éS 000,08 000,80 000 ,OdL YIsshLim otete 
00,38@,8 -000,$00,e..- 000,88@,£ 000,aLe ayswiigth etste 


-noivsouba stste 
00, 780,e@ 000, %c8,7 000 ,85L,é 000 ,000,§ is 


00 ,@8e 000, 8ec --- -<-- fotiqsd siste 
-m00 anstotoV 

00,08f£,f. ,=«-s« --=- --- nolisaneg 

00,834 ,0L 000,@3S8,8£ . 000,aTS,0L 000,687, LstoT ytawod 


00,e88,.d6f£. 000,éf£S,TL£  .000,ev8,7 000,608, esottialtd Loomdo2 
00,60)  -—-- --- --- adisi & aettol 
00O,SiS,é£ 000,fOL, df  000,S98,8 000 ,d50,7 ystio 
00,S0L, 000 ,Obd,¢ 000,e208,S 000,éTL,S avotiuteid bso 


IsooI asotrsV 


00,008,1 000,dff,f 000,0cL.S 000,éSI etotrteld 
essg9tgsaA 
00 £00, 80% 090 ,Sdé Sve 000 . 83 , Tée 000,680, Tse elsi oT 


eYOset2a s mood ash stent tsdt wore estygit seaodT 
tot asivel sds at sasotront HSitgest s ,arsoy snsost af bus 


bettyoo0 asi sasetoni eftndt to tisq tetssi1s sAT -e9saoqisg Lis 


19, 


in the second half of the period. This period, it should 
be remembered, hes been one of rapidly rising prices, and 
the sums raised by taxation reflect in considerable degree 
the growing inflation of prices and costs, The citizen 
has found that the dollar of private income would buy less 
as prices advanced. Governments are subject to the same 
economic law, and like the individual must seek such conm- 
pensation as may be found in the period of declining prices, 

This increase is shown graphically in the accompany- 
ing chart. It will be noted that the total tax levies heve 
receded somewhat from the peak year 1920. This corresponds 
with the general turn in prices and business activity which came 
in that year. 

Public bodies, however, are not able to take full 
advantage of falling prices without the greatest alertness 
and vigilance on the part of all public officials. Economy 
and efficiency in government are plausible slogans, but un- 
less the whole body of taxpayers and public officials earneste- 
ly end honestly seeks to achieve these ends as the readjust- 
ment of prices occurs, the cost of government will not come 


down. 


It must be emphasized that alertness and the 


o@L 


biluone +t ,botireq atdT .bokteq od To tisd broose oft nt 
bas ,esottq anteats yibiqsr to smo nosd esd ,hbetedmemsi od 
9e%gobh sidatodbtanoe nt toeitet notéaxes yd boats: enwe ont 
mesttio oniT eateoo bos esotiq to moltisLlint gniwotg silt 
gael wo bivow owoont otsviiq to rsifob ent tsdt bewot asd 
omas eds oF sootduye sts atnemurtevod besousvis esofitgq es 
-moo dove we0a seu Isubtvibat oft ext bas ,wal olmonoos 
- eagotta gaintioed to boiteq oft mkt bavot od ysm ss noitsansg 

-Vaisqmooos, odd at yilsoidgstg mwole ef sesstont eaidT 
evad asivel xed Istot ont tadt Dboton sd Iftw II ettsoo gat 
abnogastros efit -OSCL sts9y wAseq ot mott Isdwontoe — 
osiso nothw ytivitos exentaud bas eeotrq mi ous Isteneg ont dtiw 
meey tect at 

{fut oust of olds ton sts ,tesvewon ,astbod oifdud 
seontisis tastss1y sat tuortiw asoitad gatil[st to sysinsvbs 
ynonoof ~@éfstotito ofiduq Ifs to trsq sft no sonsiigiv 5Sns 
ens tud ,ansgofle eldieuysiq sis snenmrevog al yonetoftts dns 
eteesntss el{stolito obldug bus ateysqxst to ubod sforiw ott eeel 
-tauthbsot oft as abne saent ovatdos o3 anisoe yitasnod bas x 
emoo tom {[fkw dnemmrsvoyg to teaoo sdt ,arvo00 asotiqg to snem 
- awod 


ont bas aasattofs tsdd beste 9d teun sI 


20. 


will to economize will not suffice alone to reduce gov- 
ernmentel outlays, unless there are also at hand the proper 
means for curtailing the expenditures of the different de- 
partments. This control can be effectively provided only 
through a budget system, which will operate not merely to 
set definite expenditure limits, but to compel more careful 
husbeanding of the revenue resources. 


A more accurate view of the character of govern- 
mental costs may be obtained if we analyze the state and 
local outlays from a different standpoint. We present 
first the expenditures of the state arranged according to 
the principal functions of government. 

TABLE II. 
GOVERNMENTAL COST PAYMENTS FOR STATE 


PURPOSES IN 1915 AND 1919, ACCORDING 
TO U. S. CENSUS BUREAU 


CLASSIFICATION, 

Cless of Expenditure 1915 1919 
General Government $ 362,956 $ 421,420 
Protection to Life and Property 445,431 674,459 
Development and Conservation 

of Natural Resources 297 ,638 451,579 
Health and Sanitation 66,027 102,062 
Highways 1,524, 481 3,448,753 


Charities,Hospitals and Correction 906,251 1,506,305 


Education 4,038,711 4,952,270 
Generel 516,165 271,255 


Totals $7,939,660 $11,628,608 


0S 


-yo3 9oubor oF omols sotiive son fliw ostmonoos of Iltw 
tegozq et basd ts oels sts stent sasiny ,evsituo {sti 

-9b tuststiib sit to serusttbasgxe oft gatiistiyo tot ansom 

fino bobivots svitosits ed aso Lotinos att eatnomsisg 


ot yfLetom ton otstogo Ifitw doinw ,motave tenbud s dayo tts 
Intetso sxom Lo9qmoo oft sud at L etuttbnsqxes stinatteb ts 


eagsotyoset sunsvet ott to antdnsdeud 


-f1svogz to tesostsno oft To weiv sisis090s stom A 


bus stste edt osyisns ew tt bentaido sd ysm ataoo Isinsm 
gnsastg sW etx koghustea tnetetttbh s mort eysituo fsool 
ot gntbiooos Sbesnsi1s otste ent to astutibmeqxe sdt tetft 


stnemmtevoyn to enottonyt Isqtoaktq sds 


- LL SiSAT 
ATS AOU BTMIMYAL Te00 JATHEUMARVOD 
LTIMHOQVA i GLer il q 
gHUa 2 sc .U OT 
efer éfet gtus tbnogxd to 2esld 
osa [Ss $ 9c6@,Sae ¢ gnomersvoD Istoned 
@sh ,bVO £54 ,cbS ytaegori bas stid ot motiootort 
notisvisaned bas taomgoLoved 
eve Ids 8é3, Tes esotvoeesh LIstustsi To 

$30 ,SOL TSO 36 noltstins® bas dtiesk 
SGT, Sbd ,é [8 $36, L eyswdath 


805 ,906.1£ {3S ,30€ moisgosi109 bas alatiqaoH,aettirsd? 


OVS,Sd2, LLY, 880,s nottsoubi 
SS, 1's @aL,dLé Isteaed 


800,880,158 099,@82,%% alstot 


2l. 


It is clear that the bulk of the state expend- 
itures are for general social functions, such as education, 
highways and philantropic institutions, and that the prim- 
ary functions of the state government are a relatively small 
part of the total cost. The state has entered these newer 
fields of social welfare in response to popular pressure 
and the general tendency of the times. There are few who 
would demand the cutting off of these state activities, 
but all are inclined at times to forget the part they play 
in the increase of state taxes. 

The causes for the increase in state expenditures 
are presented in terms of the various state levies in a 
table found in the appendix to this report. This table 
gives all of the state levies made in each year since the 
beginning of statehood, In the first year, 1889, there 
were only two levies - those for the general government end 
the militia. The third levy, for interest on state bonds, 
was added in 1890, and the fourth, for state school purposes, 
in 1895. The state bond levies disappear after 1902, but 
a public highway levy was added in 1906. The total state 
levy for all purposes rose gradually from 2.62 mills in 
1889 to a peak of 7.60 mills in 1901, from which it receded 
to 4.80 mills in 1908, Four years later, in 1912, six 
additional levies were authorized, for permanent highway, 


college and normal school purposes, and the total state levy 


LS 


-baogxe otsda odd to Afsd odt tsdt asefo ef sI 
Moitsoubs as dove ,anoisonut {slooa Istoney tot ots agit 
emitq off tect dns ,amoitusiteat otqotinsiidg bas eyswrints 

fisme yloviésier s sts tnemmisvog otste ods to anoitonst yIs 
tewoen eaeds boresae eed otata oct et209 tafos sit to freq 
sivarerg telugqog ot sanogeet at atstlow Pakeed Xo abLolt 

odw wet ots stom .semtt odd To yonobaat Istones oft das 

" gotéividos etata saetit to tto gatttuo odt busmob bl{yow 
yslq yeds tusq edt tegtol ot eomis ts pentiont e1s Iis jud 

‘ekaad bhadn. Yo enaszoat edt at 

aswitbasqxe etste at sasotont ods tot esauso oT 
s at astvel otste auyolrev sdt to emrst at betnsastg 918 
efdst erat ettocert aint ot xibneqqs odt at bawot sidst 
efs sonte ts9y dose at ebsm esivel stste oft to IIf[s aovig 
exodt ,C88L ,tsey serit sot al eboodstste to gntuntged 
bas tnemnitevog Istemsg oft tot sacdd - eastvel owt yino otew 
~abnod etsta ao seeretat tot ,yvel bitds oT eitifia ods 
,aseogiug Loorfoe otetea tot .,dtavot ont bos ,0C8L nt bobbs esw 
gud ,S0CL totts ts9qqsetb eolvel bmod etste oT .GC8L mt 
etste Istot exT -800Lf ak bobbs esw yvel yswigid olidug s 
at alfta S$d.S mort yiisubsrg seaot ssaoctug Ifs tot yvel 
besdbeost tk dotdw mott ,[0CL mi alff{Im 05.V to aAseq s ot OS8L 
xta ,Sf@Ll mE ,retsi{ atsey ts0t .80CL at elltm 08.4 of 
eYewdgid tnensmisg tot ,besitodius siew selvel Isnoitibis 


yvel otsta [stot eid brs .2920ctvg Lootoe Ismton bus sgafLoo 


22. 


began to rise more rapidly. The capitol building levy 

was added in 1917, the reclamation and revolving fund 

levy in 1919, and the Centralia normal school and the 

bonus levies were started in 1921. The total number of 
separate state levies has now mounted to fourteen, with 

an aggregate for state purposes of 14,639 mills in 1921. 

The story of these levies confirms the evidence of the above 
table to the effect that the principal reasons for increase 
in cost of state government are found in the expansion of 
governmental functions. 

Re Local Expenditures; 

Similar data for a complete analysis of the total 
local outlays are not readily available. In 1919 there 
were five cities with a population in excess of 30,000, 
and for these the United States Census Bureau published 
figures which were arranged on a comparable basis. These 


are presented in the following table; 


(Over) 


SS 


yvel gakbliud Lostiqse ont ~vibiqst stom sait ot nsysd 
bast gaiviovet bus notismsloet odt .TILOL ai Sebbs asw 
edt bus Loodoa Ismtom atietins) odd bas ,@fel ai yvol 
to usdawa Istot oT .18@L at betists stew asivel axyaod 
dsiw ,masetivot of petavom won asd esivel otsta sistsqos 
efS@CIl mi allim @d8.3f to asaoqung sista ‘tot etsgstggs ns 
evods sdt to sonsbive odt amritaoo asivel ao ont to yrote sit 
sunita tot amnoaset LIsgqionii¢ oft tsdt footte ont ot aldst 
to molensqxe soit at bnvot ots tresmrevo3 otate to taoo aft 
eenoltonut Istnematevog 

sg9mntionogxe Ls00I .S 

fasot oft to aleytans stalgnoo s tot stsb aslimbe 
etedt OfCL al 9lidsiitsvs y{lbsexr tom sts aysiiuo LIsool 
.000,0& To aasoxe at notteliugog s Attw asettto evit stew 
betiatiduq ysetwG ayernod assists Setinv odt seedt tot bus 
s2onT -aftesd of{dsitsgqmoo s no boguet1s stew Motdw astuglt 


sefdst gatwollot ods at betasactg 2T8 


(r9v0) 


23. 


TABLE III. 


ANALYSIS OF GOVERNMENTAL COSTS 
OF FIVE CITIES IN.1919. 


(SEATTLE, SPOKANE, TACOMA, EVERETT, BELLINGHAM, ) 


General Government $ 1,470,000 
Protection to Life & Property 2,578,000 
Health 376,000 
Sanitation 897,000 
Highways 1,288,000 
Charities,Hospitals & Correstion 506,000 
Education 4,789,000 
Recreation 380,000 
Miscellaneous 60,000 
General 218,900 

Total - $12,562,000 


It appears from this analysis that in these cit- 
ies the total cost in 1919 of the primary functions of 
government, such as the operation of the general govern- 
mental organization and the protection of life and prop- 
erty, was $4,048,000, or slightly less than one-third of 
the total outlay. The other twoethirds, or more than 
$8,500,000, was spent for various purposes which may be 
characterized (broadly) as the social functions of modern 
government, such as education, highways, the promotion of 


health and sanitation, recreation and similar objects. 


SS 


gTZoo JATICRMAATOD @O &la 
. flo avila FO 


{. MAHDUL 


000,0%A,L § 
000,8°8,S 
000 av 
000, %e8 
000,888, 
000,808 
000,e8T,8 
000,086 
000,08 


000, 8LS 


000,988 S18 


«sto seondt mt tect 


te ODAT Et aIETARE) 


tnemirsvon [steneD 

ytieqotd & stig of moitoetort 

dt isok 

es a Se 

yswrig fH 

noltasit109. 3 ee Hy par 
noltsoube 

nolisatoeA 

avoensifsoalM 

fstemep 


- Lato? 


aleyfiens eins mort etseqgs JI 


to amottonuyt vusmiiq ent to CL@L ak seoo Istos edt aot 


-ntevoyp Isienmeg odd to molisteqo oft as dove ,tnommtevos 


-qotc bas stif to 
to bridte-sno asdt 


Moktostorq odd bas notéestusato istnom 


aeel yLlidgile to .000,880,d% esw ,ysto 


asdt sxom xo ,eabtidseows redto siT ~ysliuo Istot sdt 


ed ysm dofdw ase 


oqtuc evotisv tot taoqa asw .000,002, 8} 


myobom to anotsonut Istooa edt es (ylbsoid) bextxretosisscdo 


to moitonorg edt 


,ayswigid ,moitsoubs as dove ,inemnitoveg 


eatostdo tslimte bons mottsstoet ,molttstinse bas diised 


24. 


We are not here concerned with the question of 
the degree of efficiency and economy which may be attained 
by these cities in the performance of the various activi- 
ties which they have undertaken. The fact remains that 
in every modern community there is an irresistible demand 
that these activities be undertaken, and governmental func- 
tions are expanding in response to popular pressure. 

These expenditures are valuable and necessary 
for the general welfare. They are for the social acti- 
vities which have wrought the transformation from the raw 
conditions of pioneer life to the highly organized social 
life of the present time in the great northwest. These 
activities, however, are less fundamental than the prim- 
ary functions of government, such as the maintenance of 
public peace and safety, and the protection of life and 
property. If severe retrenchment in governmental costs 
is to be undertaken, the greater part of the reduction must 
occur in the field of the less fundamental governmental 
services, that is to say, in the social activities. 


Those who demand that severe economies in 


governmental cost be introduced, should realize the full 
significance of these demands. 


oS 


to mottasup ont diiw beniteonco stem ton sts 9W 
beanitsits ed yso doldw ymonmoos bas yorstottte to 997395 edt 
eivitos evotisv ont Io sonamtotiedq add nk aatsto seeds yd 
tsdt antsmor tost sdT .meustrebay eves yedt doidw eoslt 
busmeb oldttetsaettt as et stedt ytinwmmoo atsbom yreve at 
ont Istasant6rog bas iststitebay od asitivitos saedt tedt 
-otveestq awsluqog ot senogest at galhbasqxe sts anos 

yrasasden: bits eldavisy 9%s astutlbneqxe sesdT 
-ttos fatooe efit tot ors yoAT -otstiew [stensg sit tot 
west oat mor? mnotismiotensts odt trhguotw oved dotdw settiv 
Istoos besinayj10 yingtd ont of stil toemotg to anoisibaos 
eeodT etaowdtron tserg odd at omits tnoac1q ot To stil 
-uitg odt osdt [stnemsbaut easel ots ,irsvewod ,asitivitos 
to gonsnetaism oft as dove ,snemmisvog to enottionut yts 
bas etif to moitostotq edt bas ,ysstsa bas soseq otidugq 
eteoo [sinemnisvog at tasmfonsitet etevee iI oY T9qorg 
taum mofttoubet ont to gisq tetsetg ont ,mexstirsbau od of al 
isinemntevog Istnomshavt eaol ons to bLett odd at vane 
eecsitivittos Istooe odt ai ,ysa ot oh dour ,a90ivise 


nt estmonoos sievee ¢sdd bunsmeb ofw s8o0cT 
{fut sdt osiiset bivode sh9oubotsat ad tacos Istaommrevon 


-abnemeds s2onlt to sonsotiingte 


25. 


In view of the rapid increase of public exnpend- 
itures, and of the fact that the bulk of these increases 
have been caused by the great expansion of the social act- 
ivities of government, it is equally necessary to empha- 
size the importance of scrutenizing with care any proposed 
further extension of governmental functions. In the flush 
of enthusiasm for new projects the public is often disposed 
to overlook the fact that these new governmental: undertak- 
ings inevitably mean heavier taxes. A sober consideration 
of this increase of burden should precede any further ex- 
pansion of governmental functions. Whenever possible such 
expansions as are absolutely necessary should be accompan- 
ied by the development of new sources of revenue to cover 
their cost. 

REVENUE DERIVED FROM 
EXISTING SOURCES: 

As another phase of our preliminary survey of 
the general financial situation in the state we turn to 
a sumnary of the revenues derived from existing sources, 

We have made no attempt to strike a balance of income and 
outgo. In the above section we pointed out the chief 
causes of the increased expenditure. Here we are survey- 


ing the leading sources of the public revenues. 


28S 


-bneqms oliduq to sesestont bigsat edd To wotv «I 
seasstoni sant to wafud edt tedt tost oof to bas ,aoitt 
-tos Istooe edt to mokansqxs tse1g sdf vd boeuso asod svsd 
estgns o¢ yrsessoen yifsups et si ,tmemmrevog to aefsivt 
peeogorq YAS sts0 Atiw gnisinetwroe to sonsttoqmt ot oste 
dasflt odd al eanoisonut Istnomatevog to motanetxe todtiwt 
besogetb mosto ak otiduq ont astostorg wom tot masteudine To 
-Asttoebay Istndmnrrevog won saodt tsdt tost sat Aooltevo of 
notistebrenoo tsd0e A .sexst toltvssd nesm yYLdstivont eant 
-xe@ todiiit yas sbecsetd biworle mebtud to sasetont elds to 
cove oldieaog revensmW .enottonut Lesnemrtovog to notansq 
-cisqmosos ed bivote yrsazeosn YLotuloads sts es anofansqxs 
a<9voD of sumevet to es90tNoe wen to tnenmqoleveb ext yd bal 


etaoo trodt 


(®) TAga Wav aA 
sOe omoe OTe 


to yevive ytsitmifetg iso To Sasiq todtons aA 
of mtus ow tase ont mt nottsutia Istonsntt Isteneg ont 
e290tvoe aiitetxs mort beviteb sexnovet odd To Yismmwe 5 
bas gmoont to sonaisd s oxtrte ot Squestss om obsm svat eV 
tetdo ent suo betntoq sw nofttfose ovods sat al ~ogtso 
-Yevine Sts sw s19H ots tbnegqxs beesetoni oft To asauso 


~2ounsver olf{duyq oft to esormoe gatibsel odt ani 


26. 


The grand total of all moneys collected in the 
state for all public purposes is not easy to ascertain 
because there is no substantial method of reporting the 
facts relating to the public funds on the part of the sev- 
eral officials, and also because there never has been co- 
ordination and compilation of the fees end licenses which 
are collected and disbursed within the counties. Our 
figures relating to this subject are therefore tentative 
and subject to correction. 

We present in the table below a compilation of 
the total taxes for all purposes in the year 1921, except 
the indirect revenues collected by the various local taxing 


units. 


TABLE IV. 


SUMMARY OF REVENUES FROM 
ALL SOURCES, ¥OR ALL PURPOSES,1921. 


1 Property Taxes $68 ,206,809,00 
2 Inheritance Taxes 460,1€5.55 
3 Gasoline Taxes 411,848.63 
4 License Fees; 


a - Motor Vehicle Licenses 3 556,962.44 

b - Corporation Licenses 161,571.64 

c = Other Licenses & Fees 49,662.99 
5 Interest on Public Funds; 

a - Bank Deposit Interest 192,038.79 

b = Investment Interest 1,059,780.51 
6 Miscellaneous Receipts 18 ,140,531.45 


Total - $92,239,371.00 


With exception of indirect revenues collected 
by counties, cities and other taxing units. 


Compiled in the Department of Efficiency. 


29S 


edt mt betoetloo ayenom Lis to Latot busig. oft 
aistireoas ot yess ton el eseoqiwgq olidygq [fs tot ststea 
odt gatsttoge1 to bordtom Isitinetadsa on at stolt saveosd 
-voe oft to tisq ont mo abnut ofl[dyq odd ot gattsior atost 
.-09 aesd asd resvem gstedt sevsoed oalfs bus ,alsfiotiio Isis 
dotdw ssenooil bas aset sft to mottsliqmoo base moltsnthro 
tuO0 ~astiauoo eft aidtiw boeisdetb bus hbetoeffoo 518 
evitstast stotereds ots tosjdyea eidt of gniis{sr seta ft 
emoitosrtoo of Sostdva bas 

.to mottsiitqmoo s wofed s{dst sdt at Imsastq oW 
tqeoxe ,{S@Lf xsey ort nt asaoquyg Ifs tot aexst Istost edt 
goixst Isool ayotisvy oft yd betoetfloo esunovet soorlbat orlt 


satiny 


~ VI GISAT 


MOAT 2HUUeVEA TO c=] 
~LSOl eweaocnud LTA HOW ,SvonUoE LTA 


00,808,008 , 80g asxsT yiteqorg LI 
66.c3f,00h eexsT sonstitednaI §& 
68.358, {[f) aexsT oatfoasD €é 

:e99% sameokr & 


$3,862,003 € esensoltt efotdeV totol - & 
ed, £86, f3L agangottI motistogrod - d 
22,.399,en acest & esensoltl tent0 - 9 
sabnut oLfdyT mo taotetnI @ 
ey.80,SCi taseretnI tiaoqgal unsi - s 
fd.087,@c0,.f taeststanI gnomveaoval - Jd 
Gh. f5G,0aL,8L aftqieosi avosnsifLsoalM 6 


00..LTS, 58,806 - IstoT 


—— 


hstosifloo asunsever tosortbmi to mokiqooxs AtEW 
~asinu gotxst toddo bus estisio ,estinuoo yd 


yousfoitlti to tnsmtrsged ent ak beliqmod 


27. 


The most significant fact about this table is 
the large proportion of the total taxes for all purposes 
that is borne by property. In 1921 this was 73.9%. 

This situation is not peculiar to Washington. In many 
of the older states e similar ratio of property to other 
taxes is found. 

For example, in Minnesota the general property 
tax produced 57.7% of the revenues for state purposes in 
the same year, and 98.5% of the local revenues, or 89.1% 
of the total revenues for all purposes, In Wisconsin, the 
taxes on general property produced for 1920, 80.7% of the 
total for 211 purposes. It is evident that even in those 
states which have made the most decided changes of their 
systems of taxation, the property of the state is still by 


far the most important single source of revenue. 


This fact emphasizes the importance of thorough- 
ly efficient property tex administration. Every state 
has more to gain from a thorou reform of its property tax 


than from any other single measure of tax reform. 
We may pursue this analysis a step farther by 


examining the distribution of the property taxes to the 
different classes of property. The distribution since 


1914, as shown by the reports of the state tax commission, 


eat sldst aitdt tyods tost tnsokttingle teom oxAT 
essoqiue Ifs tot asxst Istot eft to motttoqotg satel ont 
oee.ce asw eidt [SCL aI .ytresqotg yd omrod ef tsdt 
yosm ot etotgnidesW o¢ rwtivoeq ton sf motisutia atxAT 
tonto of ysttoqotq to ottst tealtmta s aetste tebfo eft to 
ebayol ai asxst 

Yireqotg Isreneg eat stosonnt at .olqmaxe 107 
nt seaogtug sista tot asunevet odd to RY.VG booubotq xsd 
RL.08 to ,aeunevet Leo0l oft to 86.80 bas ,zesy smse oft 
ent ,atanooelW aI .moeogtvg Ife tot aeymever Istot sat To 
edt to RY.08 ,OS@L tot beoubotg ytxeqotg Istensy mo eoxst 
eeads mt neve tant ¢nobive ef st .aseogiug [fs tot Istod 
ttendt to eognsdo bebioeb teom oft obam ovad dothw adtste 
yd {ftte at otste ont to ystsqotgq odd ,moitsxst to ametaye 
-ounevet to sotmoae eLgnts tusttogmi teom off tst 

~dmgyotont to sonstirogmt srit aestasiome sost aisT 
etiste yisvi  .motisrteintmbs xst ytusqotq smototites vi 
xsd yttegotg ast tc arrotet dauotogt s moti atsy ot stom esd 
= -mrotes xst to styesom oignia esito Yas stot? asd 

wd teddast go¢e s ataydens elds svatuq ysm oW 
anit of eexst yttoqorc edt to molsudiatetb ont gatnimexe 
eonte motvudinielh oT .viregoud to eseaslo gmetsttih 


»Molaetnhnos xst siste oft to atroqet ot yd mwote es ,dfeL 


has been as follows; 
TABLE V. 
PERCENTAGE DISTRIBUTION OF TAXES TO DIFFERENT CLASSES OF PROPERTY 
1914 - 1919 


Classes of 


Property 1914 1915 1916 1917 1918 1919 


Railway Track & 
Right of Way 10.70 10.46 10.58 10,47 9.71 9.60 


Railway Rolling 


Stock, etc. 1.49 1.535 1.57 1.58 1.435 1.40 
Telegraph Lines 

& Property 204 204 04 03 203 2025 
Telephone Lines 

& Property 0535 64 « 67 68 68 646 
Street Rallways_1.73 1.69 1,62 1.60 1.79 1.56 


Total Public 
Utilities 14.49 14,36 14,48 14,36 13.64 13.245 


#ayy Other Real 
Property 72.90 73.46 720e0c 71.79 70.83 69.50 


All Other Per- 
sonal. Property_12.61 12.18 13.20 13.85 15.83 17.27 


100,900 100.00 100.00 100.00 100.00 100,00 


#tIncludes town and city lots, farm lands, unim- 
proved lands, timber lands, and all other classes of lands. 

The actual result of the assessment and equali- 
zation of property since 1914 has been to decrease slightly 
the relative proportions of the taxes levied on public 


gawollot as nosed asd 
THEIOHL @O SHSGAI0 THARALTTC OT SEXAT FO WOLTUEIATAIC BOATHEORUT 
erer - afer 


to eseasld 


erer Biel Wrer —- a.rer eLfer DIOL Nsxsqotd 


$ fost? ysewlish 
03.e IV.@ Th.0L 80.0£° 8b,0f£ OF .0L°° yeW to tadeiA 


gniifoh yewlisHh 
OL. c$.Lt 8c. To.f éc.t ea.f eot9 ,xXoose 


eenlt dgetgofsT 
eso. é0. &. BO. BO, SO. ysisqerd 3 


eenid snotgeleT 
ahd, 83, 83, Td. de. dG. ytusqorrt & 


ac,f  @f.f O08 f S@,f  C8.f  EN.£ evyewlted teense 


oifdud {stot 
GbS.dL 8B.oL B8S,AL Sb.'Lf ESL Cb .HL aettilisiu 


fsef tSsdt0 ro* 
O¢.85 €8,0% eCV.[V SESV 3h,e7 oe.sv ysxreqort 
was | aes -19T tedtO ILA 
"Ss FL cin ead OS.6f  8£.Sf  [8,Sf ytrsqotd:ifsnog.+ 


O.00f OC.00L 00.00L 00,00f CO,00L CO,00L 


-ming ,ebastI mist ,etol ysis bas mwod eebufont® 

-absost to eseesfo tento [fs bre ,ebmal tedmis-,.ebnsil bevotq 
-ifsups bas tnomeasees sit to tivest [autos onT 

Yltdatte sesetosbh ot meod asd bLCL sonte ytusqoitq to soitses 


otfduq mo beivel eexesd sot to anoittoqeirq svitsiset ont 


29, 


utilities and real property, and to increase the propor- 
tion falling on personal. 

The relative tax burden on real estate in Washington, 
as shown by the above table, may be compared with the tax 
burden on real estate in some other states. In Ohio real 
property bore approximately 60%, the public utilities 124%, 
and personal property 28% of the direct taxes levied in 
1920. In California real property carried 67.2% of the 
direct taxes in 1920, and in Massachusetts in recent years 
real property has carried between 65% and 70%. 

The following distribution of revenues from dif- 
ferent sources was reported for the city of Milwaukee for 


the years 1913 and 1920; 


TABLE VI. 
SOURCES OF REVENUE IW MILWAUKEE, 
1915 AND 19207 
% of Total % of Total 
1913 1913 1920 1920 
Revenue Revenue Revenue Revenue 
General Property 
Tax $5,198,919 54,4 $12,565,818 67.9 
Income Tax 506,965 5.9 1,076,561 5.8 
Water Revenue 871,452 9.2 Eyarr sour 6.0 
Licenses 512,006 5 if 248 ,111 6.4 
Miscellaneous 2,457,661 25.7 3,484,979 18.9 
Total - $9,487,006 100,90 $18 , 492,868 100.0 


ii waukee's Tax Problem, issued by the Citizens’ 
Bureau of Milwaukee, 1921. 


-togotg oft oesetont ot bas ,ysisqotq Lestobos estsiliss 
-fenoeisq mo gantif{st molt 

wMotgaidasW ot ststes Iset no mebuud xet evitsfor odT 
xsd edt cilw betsqmoo sd ysm ,efdst evods ont yd mwosle es 
{set ofd0 al -cotsse rerio anoe ni otstese Iset no nobund 
Sl eottilitu olfdugq ofs 0d eletantxozqas etod utxeqorq 
ni! betvoel eoxest fostib eft to RSS ytroeqotq Lsnoereq brs 
edt to RS.'3 betisso ysisqotq Iset simrotifsd) mI  s0ser 
arsey tneost mk attoeurioseasl ni base ger mt esxst toetkb 
Ol bos 88d moowtsd betimso es ytrsqortq Iset 

-tib mort esunmovet to moltvediutetbh antwollot oAT 
tot esxvewlill to ytio oft rot betiocet esw ago tvoe taste 


;0S@L bas €L@L ersey ont 


~ilV Wear 
aaa ur EEL %O_EHORU0E 
IstoT to & IstoTto Ri. okt 
osel oser eel éLeL 
Sune veh ours von eunaven SUMSV OF 

es = aoe ‘ydieqotd Istensd 
e.%d 6L8,0082 Sie &.s2 ere ,eeL, ag xsT 
8.2 [8 ,aTo.L é.é G80,d0G—. xsT emoont 
0.8 FEE OMI SL See sé3,{[T8 eunsveH rtstsW 
S,9 IIL, 8bS b,c 800 ,SLé esansokt 
e.8L eve b8h.é T.eS_ __ f00, TEs .S evoensi{sce il 
0.00L 688,Seh , SLB 0,00L 300, Teh, CF - {stoT 


tanoesitio ont yd beweet ,mefdorl xsT e 'eoauew! iM 
»f8@f ,ssivswlit To uso tue 


50. 


It is apparent that the relative distribution 
of taxes to different classes of property in Washington 
is. not greatly different from that which prevails in other 
states. We do not mean that this burden is not a heavy 
one, nor that it is a situation which does not call for 
study and possible correction. We cite these figures 
to show that the state of affairs complained of is not 
confined to Washington. 

There can be little doubt that the present prop- 
erty tax burden, the country over, bears with greater ap- 
parent weight upon all classes of property on account of 
the serious effects of the general business depression 
of the past two years. Business activity has greatly 
slackened, and rents. and incomes have declined, while 
taxes have remained fairly constant because of the com- 
parative inflexibility of public expenses, For example, 
the city of Seattle bore with patience the tax load of 
three to five years ago and in addition the tremendous 
burden of special assessments created by the local improve- 
ments. then being paid for, Business at that time was 
good, and the tax load was not then thought.to. be an op- 
pressive burden. Business is dull now and the tax load 
is oppressive in consequence, 


We have suggested that the tendency toward a 


06 


nottudiudeth eviisfer oft tedt. tnersags al iI 
noignidesW at yiireqotc to seeaslo gnetetithb of sexsit to 
sedso at elisvexq doimw tedd moti tusrotith yiteets son et 
yveod.s tom af nobtwd ett tedd neom ton 05 of .actate 
sot ffso ton aeob doidw noiieutie s ai ti dads sz0om,,en0 
esrpaltt seott etto. sW snoitooti1oo eldissog bas ybute 
ton.et to bentsiqmoo exisits to otese odt sect worse ot 
-cotguinesW ot benitnoo 

-qotq tnsec%q oct tect Sduoh olstsiil od aso sued 
-ge totsetg dtiwatsed .isvo yitawoo sls ,mebisd ast y¥ste 
to tnyooos. mo ytteqotg to sseesfo I[fs mnogu togiow tnorseq 
nolesstqeb eeenienud.Isitenep oft to atostis exolise ont 
yYiisetg esd ysivitos aasntieud -aisey owt tasg sr to 
elincw ,bonifosh sven eonioont bas etnoit bas ,bernsrosle 
~uoo ont to eensosd snstenoo yiuist benismet eves eexst 
~oligmsxe toi , aeanogxs oliduq to ytiilidixslin£ svitsis¢ 
to bsol xst eft sonetisc ditw erod eittse2 to ysto eds 
exsobnemert edt motiitbbs of bns ogs.aitsey svit of soit 
-evotgqmi Isool sit yd betsoto etnemeeseas Letooge to mebaud 
esw omits tedt te eeonievi .xot bleq guted medd educa 
-qo ns od ot tdguort nents ton asw beol xst ot bas ,boog 
bsol xs odd buns won Ifub ef eeontaud -mebhinud svieastg 
-oonsupsenoo ai evfsasaqqo at 


& biswod yonsbnes ont stsdi betesazgue sven sW 


Sl. 


still higher cost of government which is now so universal 
may continue for a time in Washington. Whether this in- 
crease, if it occurs, will press more and more heavily on 
the taxpayers will depend upon the relative growth of the 
wealth of the state, and the degree to which the public 
officials, state, county and local, are able to introduce 
higher standards of efficiency and economy in public af- 
fairs. We are glad to be able to say that at our public 
hearings little evidence or testimony was offered to show 
that public officials are careless, indifferent or inef- 
ficient in their administration of the public business, 
On the contrary, citizens often spoke of the high quality 
of service given by many of these officials. 

We have been impressed, however, by the extremes 
to which the multiplication of local boards, levying bod- 
ies, and tax-spending agencies have been carried. With- 
in the county there are the municipalities, the school 
districts, road districts, drainage districts, and other 
local improvement areas, and in some are port and harbor 
boards. The cost of local government has been unduly 
enhanced by reason of the vast number of overlapping tax- 
levying and administrative boards. A reasonable reorgan- 
ization of the local government could be effected which would 
safeguard the popular interest in local autonomy while it 


would make possible considerable economies. 


LE 


Isatevinss oe wom et doisw tnemritovog to teoo tergid [Lite 
ect etnd sorltendW  .notgntdesW nt omit ¢ tot euyattnoo yem 
no Vltveed etom bus stom eset [fiw ,etuec0 ti IL ,9assto 
Skt Yo dtworg oviteler ot mogy bneqeh ILiw eteysaxat ext 
oiidugq ort dofnw ot sergeb ent bone ,.stste sat to diisow 
eouborgnt of elds ste ,Isool bus yirnsoc ,stste ,elstottio 
-te ofiduq nt wiottoos bns yorstotite to eabtsbnsts terngin 
oiidug tuo ts tsdt yex ot elds od of bale ots SW ,etist 
“wore of betetto esw ynomttest ro somebive oLfstil agniuser 
«text to ¢neretttbnt ,eesferso oxs elstottte silduq tadt 
seeentesd otidug odd to mottentatnimbs themt nt ¢notott 
ytileup mein ont to eaxoca métto emestito ,yrertnoo ant m0 
-elstottto seeds to yasm yd mevig sotvise to 

sonseitsxe ent yd ,tevoworl _beecotemt need oved oW 
-bod antyvel ,abrsod’ L[sool to notisoiiqitium ort totdw ot 
-fitiW  .betxras need ever! eetonens gribnege=xet bas ,est 
Loonoe oft ,@eitileqtotnum ofs sts stent ytauoo edit at 
tsfito bie ,etotitetb oganistb .atoitierb bsox ,etoiatethb 
todtend bas dtoq sits Smce al bis ,esets prone roam eae out 
yisbau mood es Snemmisvog Lso0t to teoo oxiT ~ebtsod 
-xst pniqgslieve to tedmwm tasv oft to moaset yd beonsrine 
-1sgtoet sidenoaset A -ebtsod sviisttetaimbs bas antyvel 
biwsow dotiw betostte od blyoo snemftevey Is50l oft to notisst 
£ olitiw ymonotus Lescol mi tesrstnmt tsingeoa eft bisyyetes 


-e9imoroos oldstehtenoos ef[dileeog susm hbilxyow 


32. 


CHAPTER III. 


SURVEY OF THE WASHINGTON TAX SYSTEM, 


1. QUTLINE OF 
THe REVENUE LAWS: 


The trend of public expenditure is, as we have 
seen, toward greater outlay. This trend can only be 
counterbalanced by greater efficiency in government or 
by the curtailment of public functions and the reduction 
of the social subdivisions. It is highly desirable that 
economy and efficiency should prevail, and it is of the 
utmost importance that each proposed extension of govern- 
mental activities should be scrutenized with great care, 
especially in view of the steady rise of tax rates and 
tax burdens. It is improbable that any radical retrench- 
ment will occur in either the range of governmental acti- 
vities or in the level upon which these functions are now 
being financed; and the fundamentally important problem 
becomes, therefore, that of the more equitable distribu- 
tion of the existing tax burden. This distribution is 
determined by the kind of tax system which is in use in 
the state and by the manner in which the taxes are admin- 
istered, There is general complaint that certain classes 
of property are now carrying an undue proportion of this 
burden. The basis of this complaint and the possible 
lines of reform can only be understood from a survey of 


the tax system and its present administration. 


S86 


~LIL AUTIARO 
sMuTeYe XAT WOTDWINSAW EET TO YEvAve 


mn wus of 
7a wT 
eved ow es ,et stuttbaeqxe off[dua to baert onT | 
ed yimo nso baexrt aldAT ysltvue ustsety biewos (11998 
to tnemmtevog ak yoneloltite istse1g yd beonsiIsdrsesnyoo 
noitoubet ot bus enoltonuwt otf{dugq to smoemitetiauo sit yd 
tent eldetiteasb virgin ei sI eenotaivibdse Istooe edt to 
est to ak ti bas ,fLisvetgq bivole yonetotite has ynrono08 
-mtevog to motsnetxe besogotg Moss tsrit eorstioqmi seomty 
,etso gserg dtiw besinstutos ed bi{yofe eottivitos Istnem 
bas eosts1t xsi to eeit ybsete orlt to weiv ai yilsliooqes 
-tonettet fsotbst yas tsdt efdsdoiqmi ef iI -enobtud xst 
-ttos Istnemrtevon to ezms1t od tsctie nt iwooc9e Ifiw tnom 
wom ets emoljonut seedt dmoinw noqu fevel odt ai to aottiv 
enbhdid tnstcogmt yiletnomsbawt odt bus ;beonsnit aniod 
euditstetb efdstiups stom edt to teat ,etotetedt ,aonoosd 
ek mnottudkasarh ealdaT enebtud xst anitetxe odd to nol 
nt ees at et doidw meteye xst to bata ort yd benluteteb 
-nimbs ors eexsat ont dotdw ak tennsm ent yd bas stste orld 
deamnte atst1eo tedt tnisiqmoo Istemeg ef o19cT ehetotet 
eifat to motsieqotc sybny as guiyitso wom 91s ysteqotq to 
esIdteaeoq oft bas tutsiqmoo eint to efaed ont qin det 
to yeviwe s mort bootetebay ed yino aso mtotet to aentl 


efotssrteinimbs tmoeetq ett bus moteye xet odd 


33. 


The basis of the Washington tax system is the 
general property tax, which is prescribed by Article VII, 
Sec. 1 of the constitution. This section is as follows: 
"All property in the state, not exempt 
under the laws of the United States or under this 
Constitution, shall be taxed in proportion to 
its value, to be ascertained as provided by 
law." 
Section 2 contains the further provision that, 
"the legislature shall provide by law a uniform and equal 
rate of assessment and taxation on all property in the 
state according to its value in money and shall prescribe 
such regulations by general law as shall secure a just 
valuation for taxation of all property, so that every per- 
son and corporation shall pay a tax in proportion to the 
value of his, her, or its property." 
The law now requires that all property be assessed 
for taxation at fifty per cent of its value in money. 
The assessed value of real property is to be fixed in ev- 
ery even numbered year, and such property is to be assessed 
and taxed in the district where the same is located. Per- 
sonal property is defined by the statute as including "all 
goods, chattels, or estates; all improvements upon lands 
the fee of which is still vested in the United States or 
the State of Washington, or in any railroad company or 
corporation, and all and singular of whatsoever kind, val- 


ue, nature, or description, which the law may define or 


the courts interpret, declare and hold to be personal 


bE 


emt ek metaye xst notanidesW sat to etesd oT 
~eIIV eLotsatA yd bedizoac1g ef doitdw .xet ydusqotq Letenes 
sewollot es at noitoee eial -nolsudiseanos efit To i .292 
tqmexe ton ,siste odd at ytroqotq LIA". 
aids t9ebny to astste bedinU edt to ewel ort tobay 
ot motttoqotq mit bexst od Ifsde ,motiusttenod 
ud bebtvotg es benistteces od ot ,eoutev est 
* wel 
,teds motetvoig tedtivt sit aniistnco § moitose 
{sup bas mtotinu s ws yd sbhivotq Ifisde otssslelgel sds" 
ent at ytroeqotc Ifs mo noitsxsi bas dnoemaeeaes to etet 
editoesta Ifsde bes yemom mi suisv eti oF gntbtooos sista 
teut s sivoce Ifade es wel [stones Yd anotteiuact doe 
-ISq YISvs ¢sdt oe Wytteqotq ILs to notiexss tot nottauIsv 
edt o¢ molttogotq ni xst s yea Iisde motistogioo bas noe 
3 " .ysdteqota ati to , tod ,eid to eulev 
beeceees od Ysrsqotq Ils tat eotiupet wom wal osT 
eyetom at eufsvy sti to sso xoq ystit te noisexad tot 
-vo mi bextt ed ot ef ytteqotq [set to sulev beceoces ont 
beeaseas od of ef ydreqotq dove hms ,tsey betodmun neve yte 
-to¢ ,betsool et emse smd stodw toitteib ont mt bexsi bas 
ffs" gntbufont es etutste ont yd benitob et ytiscotd Isnoe 
ebasif moquy efnemevotqmt IIs -eedatee to ,elotisdo ,eboor 
ro eesste betinU ost nt beseev Iftte ef dotdw to cet ont 
fo yusqmoo bsotiis1 yas ni to ,mosanidesW to siste orit 
-Isv ,bDbatx tesvoocatsdw to asivante bas ifs bos ,sotistoctoo 


to sniteb yseo wel sat dotdw woLtqitoaed to ,ctutsn .9u 


Isnoetesq sd ot HbLon bas etelooh ,totgtetat ediuos sad 


34, 


property, for the purpose of taxation---", This legal 
definition expressly excludes from the category of person- 
al property for purposes of taxation, all property used 
exclusively in trade between this and other states or 
countries, and also all mortgages, notes, accounts, certi- 
ficates of deposit, tax certificates, judgments, state, 
county, municipal and school district bonds and warrants, 
No deduction is now allowed on account of an indebtedness 
owed, Leases on real estate and all leasehold interests 
of a term less than the life of the holder are to be ree 
garded as personal property. 

All personal property shall be listed and as- 
sessed in the county in which the owner or agent resides. 
Exception to this general rule is made in the case of 
standing timber held or owned separately from the land, 
fish traps and nets and fishing locations, lumber and saw 
logs. tated classes of personalty are to be assessed 
where they are situated. 

Corporations: 

The real and personal property of ordinary bus- 
iness corporations is to be listed and assessed in the 


same Manner and by the same rules as the similar property 


feygel alfdtT ,Wae-Holtsxss to se0qing sHt Tor .ysusqoig 
-noateg to yrogetso sat mort eebploxe ylecstaxe poltintteb 
boeu ysroqota Ife ,molsaxsd to sescqt¢ tot ysteqote Ls 
to eestste rtesito bna etdt meowted sbhets alt yLevieutoxe 
~is1eo .etmyodos ,aston ,eegssitom Ife onls bas ,estitavoo 
.edsde ,etmomabut ,aeteottitiso xsd ,tieoqsbh to estes tt 
wetnetiew bone ebmod tolisetd Soonoe bas Isqtotaum ,ytmuoo 
eaesnbetdebat mse to tayooos mo bewolls won ef mottoubeb olf 
eteotetnt blodsensi Ifs bas etstae Isert mo abasol .bswo 
wor od o¢ ote tobrod of} to ott ont ment eeel met s to 
 \ydtecot¢ Isncereq es bebtsy 

-es pus beteil od [fede ysteqorq Ienoateg IIA 
.eebiest tnegé to tomwo sat dotrhy nt ytasos ont of bsaase 
‘to seso oft nt sham eit sles Istensg efdt oF noliqooxi 
Dbusl 9X3 mott yletsirseqeea berwo to bled tedmiyd gnthnste 
wee bae tedmul ,enoitsool gnidatt bons eton bis eget ett 
beeasees od ot S18 ysiisnoe19¢ to eseeslo seen? enol 
bessutte ots yeds stodw 

renoisetogtoo 
-end visntbhbto to Ytaxeqorq Isnoarts¢ bus Isst onT 

ect at beeeseas bne beteati sd ot ef eanoitstoqios eesnt 


yersqotg telimie sit as aslur omse ont yd bas TOMNBM Smee 


55. 


of individuals. The personal property of gas, electric 
and water companies, street railroads and other road and 
turnpike companies, and of express, transportation and 
stage companies is to be assessed in the counties 

where the same is usually kept. The operative property 
of steam and electric railroads and telegraph companies 
is assessed by the state equalization committee, 

Bank stocks are assessed to the owners thereof 
in the cities and towns where such banks are located. 

The assessment is at the full and fair value in money as 
of March first, with a deduction of a proportionate part 
of the assessed value of the real estate belonging to the 
bank. In practice the banks assume and pay these taxes 
for their stockholders. Shares of building and loan 
associations are exempt. 

Insurance Companies: 

Insurance companies are under the jurisdiction 
of the state insurance commissioner. The state has pro- 
vided for a series of license fees, mainly for regulative 
purposes, and also for a tax on premiums as a revenue 
measure. The schedule of license fees paid by the com- 
panies includes; 


(1) For filing articles of incorporation $25.00 


oirtoole .asg to ystrteqotq Isnoateq saT elsubivibat to 
bas bsot tedto bas ebsot{[is1 tserte ,eeinsqmoo istsw bas 
brs Roldessogaanss ,2207gx9 to bns ,e9inegaios extend 
aektasoo edt ot beaceees ed of ef ae tnsgatoo euste 
ytroqotg svitetego oT .tqox yifsueu ef one ect ot ociw 
setnaeees dgetze fet bas absorlist otitosle bis msete to 
29st inmos noitestleupe etate sit yd beeeoues at 

tootesdd eatenwo ont ot beacsass ots exoose Ans 
_ ebakanas ots e2ieC Nove otedw anwot bus aetiio ould ni 
as “eantom nt oulev thet bas iis? eat ts at tnemessees oT 
gisq etsnoitirogotq s to mottoubeh s dtiw eterit dots to 
exis ot gnignoled etstee Ise1t sit To ontay peaeeaas ont ‘To 
eexss seotis ysq bons eswees alnsd ent eottoatg at ‘dau 
meol brie gatbiiud to esetsd2e eatebfodaiocota tiedt tot 
etQmexes SIs anoitstooves 

:eotoesqmod sone twenkl 

nottotbetwi eat tobay sits aolnsquios cone twenl 
“org esd state onT tenoles tamed eons twant hate oat to 
evitel[yugex tot ~inism ,easet sansotit to eeltoe 8S tot bebiv 
eunsvet 8&8 as souiseta mo xst es tot oats bas ,2eaoctug 
-moo ont Ms bilsg eset seneottl to esfubodoa oat e9TVesSsit 
:eebutoni asinsg 


00.cS% moitstoqzioonmt to asfLoléns gatltt rot (L) 


36. 


(2) For filing amended articles of incor- 
poration $10.00 


(3). For filing annual statement of con- 
dition and report of Washington 
business 20,00 


(4). For filing other miscellaneous 
papers 1.00 


The state also imposes a tax of 24% on all 
premiums collected or contracted for, Companies engaged 
in any kind of insurance other than life, are permitted 
to deduct from gross premiums the amounts paid policy 
holders as returned premiums. Life insurance companies 
may deduct only the sums paid as premiums to admitted 
companies as re-insurance, If any insurance company 
shall have 50% or more of its assets invested in any bonds 
or warrants of this state, or bonds or warrants of any 
county, city or district of this state, or in taxable prop- 
erty within the state, or in first mortgages upon improved 
real estate within the state, the tax shall be 1% of the 
amount so collected. 

Privilege and License Taxes: 

In addition to the property tax and the license 
taxes mentioned above, the state imposes a number of priv- 
ilege and license taxes, partly for the purpose of secur- 


ing revenue, and partly as a means of regulating certain 


-toont to aefstirs bebaene gntlit.10f . (S) 
00,.0L% noltstog 


-nod to ¢nemetsta Leunns gntitt x0 (8) 
notynidesW.to-ttoqet bas. moltih.., 
00,0S eeentesd 


auoenslfooaim tento patitt sof (4) 
¢ ertsgs¢ _ 


oo.L 

ifs so RS to xsi s eseogmk oels. stste oNT 
begzsyus eotseqmod stot botosatnoo to betoslLloo enwime1g 
hbettinueg ots. ,etil asdd asdto eonmetyeni.to bnia yas at 
yotlog bisq atnwome ods ecutmorq eeots moti toubeb ot 
eoinsgmos sonesivent stid -eomimeitqg bentusex es etoebfod 
bettimbs ot emuimerq es bisq anwe ond yino tovbeb yem 
_NMsonco sonstuyent yis II, . ,eomsitvent-et es esinsgmoo 
abnod yas at beteovat etseas asi to otom to ROG svsd {fede 
yas to atnsiasw to absiod to .,stste eids to esnsiisw 10 
-gotq ofdsexst nt io ,etate aigt to sofatath to ysto .ysnuoo 
bsvotqmi noqy sepzentiom tetit.aLl to ,etste edt.oidtiw yixs 
eid to RL ed. [isde xsd. sd. ,stste ons midtiw, etstes, Isex 
ehstoelloo oa snwome 

189 oansot sy) 9 v 

seneotl oft bas xnat ytisqotgq edt. oF moist i bbs. ol 
-vitg to tedmmn s aseogmt stste sit ,svods. benclinom, esxss 
-tuose to seogivg oft tot yiiasq ,soxss, sencoit bus spelt 


Nistiso gniteluget to ensem 8 as yiitseq boas ,sunevet unt 


37. 


activities. Express companies pay 5% and car companies 
7% on gorss receipts from business done within the state 
in lieu of all other taxes except on office and other 
equipment in the various localities. The object in 

this case is simply that of securing revenue. The nature 
of the business makes any other form of taxation imprace- 
ticable, 

Motor Vehicles; 

Motor Vehicles are taxed as personal property, 
and in addition the owmers are required to secure annual 
licenses, the cost of which is determined by the size and 
power of the cars. Each person who drives an automobile, 
whether owner or not, is also required to secure a license 
as an.operator. The receipts from these license taxes 
are used exclusively for the construction and maintenance 
of the highway system of the state, and the recorded ser- 
ial license numbers afford a means of regulating and con- 
trolling the use of motor vehicles. 

Corporation License Taxes: 

Two. distinct license taxes are imposed upon, cor- 
porations. The first is the filing fee of $25.00 which is 
exacted from all new concerns at the time the application 


is filed for the articles of incorporation. The second 


esinsqmoo t£9 bas 8é yeq esinsqmoo eretgqxil -eottivitos 
stste ont oidtiw emob eesntaud mort etgteset eetog mo RY 
tondto bus soltto me Iqeoxe easxsi usdto [fs to wot at 
at tootdo oedT -esttifsool evotisv eat at tnematups 
etuisn eT -ounever gnituvose to teds ylqmie et saso eidt 
eostqut mnotisxst to mrot asdto yas eoexsm eaonteanud edt to 
| eoldsolt 
seslotseVv tos on | 

Yttegorte fenostsq es bexst sts eefotdeyv tod olf 
{fsunns etuoes ot betinupet ets eatsmwo oft mottibhbs ati bre 
bas ssie ond yd bentattoteb ei Molsdw to teoo oft ,esenooll 
~elidomotue ns esvitbh odw noetseq dosi ee1so0 oft to tewog 
sensoll s etuose os betiupst cele ai ,ton to temwo iasidtodw 
| eexss sansoll eaods mort apghopes oT etotstsqo 18 ee 
sonsnes atest bas nottours en09 ent zot vleviewsoxs beeu ots 
-15@ bebtocet esis bie ,stste est to wbsace yswals tt edt to 
“109 bas paits{[yget to ensem s biotts eisdmun sansolt Ist 
| -eolotdev totom to sen edt gniifort 
:B9xsT eereol sols szecigo He 

-109 noqu beeoqmt ets aexsd sensoil tontterb owl 
ai doicw 00,886 to ost gnifit ort ei teaxtt oAT -enoistetog 
mottsoifqgqs sms omtt ont ts antsonoo won Ifs mort besosxe 


brnoose sxiT aottetoqiooni to easfLotiizs smd tot Bbeltt at 


is the privilege tax of $15.00 per annum, which is lev- 
ied upon all corporations doing business in the state, 
These receipts are covered into the state general fund. 

Inheritance Tax; 

A tax is imposed upon the net value of all prop- 
erty within the jurisdiction of this state, and any inter- 
est therein, whether belonging to the inhabitants of this 
state or not, and whether tangible or intangible, which 
passes by will or inheritance, or by grant, sale or gift 
in contemplation of death. The rates are graduated ac- 
cording to the size of the estate and the degree of rela- 
tionship of the beneficiary. Bequests to charitable and 
educational institutions are exempted. The inheritance 
tax receipts are deposited in the state general fund. 

Poll Tax: 

An annual poll tax of $5.00 is imposed upon 
all persons in the state over twenty-one years and under 
fifty years of age, except idiots, insane persons and 
persons supported at public expense. Fourefifths of the 
proceeds are to be deposited in the state general fund, 
and one-fifth in the county current expense funds. In 
the event that the collection under the levies authorized 


by the Veterans Equalized Compensation Act are insufficient 


“vel et Aotiw ,munis teq 00.218 to xsd sgelivita oft et 
.otste oft at eeentend antob emotssirogrod [fe toch bet 


.bavt Istensg etete sit ofnt bstevoo sts atgtsost scent 


6 : 


iy ize? eonst trodnt 

-qorq [fs to sulsv ten ent soque beaogmt ef xsd A 
erSint yns bone ,esete etait to motsoibetapt ent midsiw yt 
eidd to atnstidssint odt ot gntgaoled redtenw ,aistsat tee 
doisdw ,eldignetat to seidignst tentedw bas ,ton to siste 
Stig 10 olse (¢nsts Yd to ,soassitentnt to {ftw yd eseesq 
=o8 betsubsets sis asts1 onT § .dtseb to moisslqmeinoo nt 
-siet to setash ent bas ststee eft to este ont of gnibtoo 
‘bas efdstixeto ot etesupsd .yrstottemed dt to cisenott 
Sonsiitednt etl .betqmexe ste enottutiteant LIenottsoube 
buut [etenen etste oft nt betteoqeh ets etqksoer xst 

~3xeT Lfog 

moqu besogmt ef 00.8% to xed Ifog Launne mA 
tsbnu bas etsey eto-ytnews tevo sista sit nmi emoateq Ifs 
bas amoeisg onsent ,eftorht tqsoxs ORS to exsey esttt 
ems to adttit-qwoT -oensgxe olidugq- ta bettogque enoeisg 
bust Lerensy stste ont at besteoneb ed os eis ebssootg 
mI .ebnut sanegxe tnetry9 Ytnwoo srt mi A¢tit-sro bas 
besttondtus esiver sit rebny mottoetioo ont tact tusve ent 


tnetotttvant ous’ toA notéseneqmod besiiaupH anstoteV ont Yd 


39. 


to pay the interest and principal on the bonds issued 
under this act, the legislature shall make appropriations 
from the general fund for these purposes in an amount not 
to exceed the poll tax receipts deposited in this state 
fund.  (L. 1921, Ch. 174.) 

Gasoline Tax: 

An excise tax of l¢g per gallon is now levied 
upon all liquid fuel sold in the state for use in inter- 
nal combustion engines, to be paid by the distributors 
thereof. Kerosene is excluded from the operation of the 
tax. The receipts are deposited to the credit of the 
highway fund. (I. 1921, tH.” T73..) 

Various Local Licenses and Fees: 

The various local officials in counties and cit- 
ies are authorized to collect fees for a considerable nun- 
ber of services rendered, Examples are the fee for the 
issuance of marriage licenses, the filing and recording 
of real estate transfers and mortgages, the issuance of 
warrants, etc. These fees are charged for the purpose 
of defraying the costs of the local offices, and the col- 
lections are used for that purpose. 

Ze ADMINISTRATIVE FEATURES 
QF THE WASHINGTON TAX SYSTEM: 
We have already stated that the most important 


beoveat ebnod edt no fsqtoniig bas testetnt edt yseq ot 
encttsliqotaqqs oxem Iisce etssletzel ext tos efdsd tebap 
ton tnuyome os nt eeaogiug saent tot hawt Ietomss eat mort 
etst¢e etdt ot betiaogeb atatooot xst {fog ont besoxe of 
(.80f .d0 (I8@L 1a) 9. pnt 

:xeT_srifoeso 

betveL wom at nofisg toq yf te xst saioxe nA 
-tsini ni sau tot otste ont at bloa Lout bkupii Ils maoqu 
etotuditters edt yd blsq ed ot ,esnigne moltaudmoo iets 
ext to soisetogo ent mort bebuLoxe ef sneeore7 -tootestt 
eds To gibeto ods o¢ het balant Sis atqtece1 aANT oxat 
) (.89L .o0 ,LSCL .2) .bawt yewigta 


299% Drs asensotd Issod avoitsV 

atta bas estinuyoo at efeioltto L[ecol avolisv odT 
-cusnt oidateblenos s t0t eost toeLLoo os besitondus sis aol 
sit tot ost sat ots eelqmsxd betosbast esotvise to t9d 
gnibtoost bis antf£it ond ,eeenesoll sasiirsm to sonmsyeet 
to sonsueel ont ,eonsyttom bas etetansit ststes Isst To 
ssoguug sot tol beatsdo ets eoot sacnT eote vesenvuite 
efoo sdt bus .2ooitto {se0f sft to eteaoo ont awh eeetes to 


.o20ctug g$eds tot been ers enofioel 


exAUTAGH GVITAATETMIMGA .S 
sMetteYe XAT HOTOUIHEAW LET ZO 


tnetiogmi teom ont tadd betste yosetts svad sW 


40. 


aspect of the problem of public finances in this state 
is, in our opinion, the more equitable distribution of 
the tax burden. It is evident that this is a problem 
which involves both the form of the tax system, that is, 
the kinds of taxes that are used and the manner in which 
these taxes are administered. In the preceding section 
are summarized briefly the kinds of taxes used in Washington, 
and in this section we shall first outline very briefly 
the administrative machinery which has been set up and 
then proceed to our criticism of the operation of the ex- 
isting system of state and local taxation. 

Administrative Organization: 

The first, and in many respects the most import- 
ant tax official is the assessor. The county is the as- 
sessment district, with the exception of Spokane and What- 
com counties, in which the township is the unit. The 
assessor is locally elected, serving in the townships for 
one year, and in the counties for four years. 

It is the duty of the assessor to call upon each 
person, firm or corporation in the district and secure 
from them lists of their taxable property. The law re- 


quires that the assessor view this property and assess 


etste eidt ai eeonsntt otfdugq te mefdo1q eft To tosqes 
to mottudtiateth aldstiups srom oft ,.motnigo ts0 mi ,et 
meIdoig s ef efndt test tnobive ef sI enehtud xst odd, 
eet tedt ,moteye xet odd to mot ond stod eevlovael doidw 
doisw at tennso offs bos beau ots saris eexsd to abnia orlt 
moitosee grihsostq srt al betetainimbs ets eexss seeds 
MotanidasW mi beau esoxat. to ebnid edt yltetid besitsmmwe ots 
YLielad ytav ontifsuo sarit If{sde ew moitoee aici ni bas 
brs. qu rye need esd Mdofdw yuentnoam ovissiseinimbs ont 
-xe oft Io moltatego ods to mefoitizno awe ot bssooty ness 
enotssxst [eool bus otste to meoseye gniteat 

wmoiissinsar0 svissateinimba 

-txogmi taom eft atosogeeot ynem af bos ,setit ot 
~2s. oct af ytnuoo sil. .toveeses oft ef Ietoitio xsi ins 
-tsoW bas onswtoge to mcitqsoxe ont ditw ,totisetih tnemeace 
eT eting ondt afl qidenwos sit doinw ni ,eeitayoo moo 
tot ecidanwos eds ai gaivise hbesools yiltsool al toeesees 
e2TH98Y, Iwol tot eaiinyoo oft mi bus eTSEY So 

moss. noqs [fso cs toaasees. ont to yiub. ont 2f tI 
sinoea bie totrtath oft at nolistogtoos to miit ,moeieg 
-81 wel onT eYtteqotg sldsxst atent to asetl ment moat 


eesees bus ytieqotq sist weiv toeesses edt Sst eetiup 


or determine the value thereof for taxation purposes. 

The accuracy and completeness of the lists are verified 

by the taxpayers' affidavits, but the oath does not ap- 
ply to the valuations which are placed on the several items 
by the assessor, Deputies may be appointed for such per- 
iods and at such compensation as may be guthorized by the 
county commissioners. When the assessment is completed 
for the district the lists go to the local board of equal- 
ization for review, correction and equalization. The 
county auditor is empowered to add omitted property. 

The county board of equalization is composed of 
the county commissioners, the county assessor and the county 
treasurer, or a majority of these, with the assessor act- 
ing as clerk. This board meets annually on the first 
Monday in August for the purpose of examining and compar- 
ing the returns of the assessment of property in the county. 
The councils of cities of the first and second class shall 
select a committee of three members to act with the county 
board with respect to all property situated within such 
city. In the course of this session, which may last not 
langer than three weeks, the county board may raise or 
lower the valuation of any tract, lot or parcel of real 


estate, or of any class or personal property, or the 


saseoging moitsxss toi toetent sxisy odd entmiseteb to 
bettiuevy ets etetl ont to asensteof[¢qmoo bas yostuoos sdT 
-qa tom es0b sitso oft tud ,etivebiits ‘eteysqxes odd yd 
ameti Isveves eft no boosie otc dotdw enottsrisv ot of yl 
-toq move tot besntoqcs ed ysm asituqed etoOeasees sat yd 
edt yd besttodtua od ysm as soitsaenoqmos dove ts bas ebot 
bstefqmos at tnemeagess edt nodW etonolaaiomoo ysinvoo 
-Isups to bisoed [sool sft ot og ateil sat toate tbh oft stot 
eit eftoisssitisups bas moitoottos ,wesivet tot moitest 
eustteqotg bottimo bbs ot beteswogms el totibus yinuoo 

Io beeognoo af nottssifsupes to basod ysinuco oT 
yinvoo oft boas toaeesees, Yinwoo oft ,atsmolgaiamos yinuoo ont 
«tos toeesees sds aAttw ,seesdt to yiitofjsem s to ,1msiwesstt 
gazrit oft mo yif{sunns .atoom*brsod efdT.. oatefo es gat 
-—tsqmoo bas giinimsxe to seogqisg eft tot teunuA of yebnol 
-YSavoo snt af ytaeqotq to Snomeeoaes oft tovantutor orlt gat 
(fistie sesfo-hnoose bos terit ond to aeitio to elfonnoo-edT 
yiasoo oft atiw gos ot exsdmom sordt to settinomoo »s. toslea 
dove nidtiw betsuife yiuisqotq [fs ot toeqeet Mtn bisod 
son tesl yvso doisdw ,noltaese aeidtd to semoo sat al «utto 
-o%0 gaist yam btsod yinwoo soit ,atsew setdt ocadsd tognst 
{set to [9o%sq to tol ,tosts yas to moiteuIsv ods srewol 


edt to eYtxeqorg {snoatsg to easio yus to to ,sisies 


42. 


aggregate value of the personal property returned by any 
individual, wherever it believes that the value as assessed 
is not the true and fair value for taxation purposes, 

Five days notice in writing must be given to any ower 

of real or personal property before an increase may be 

made in the assessed value, 

The tax rolls for the counties, when equalized, 
are forwarded to the state auditor for submission to the 
state equalization committee, This committee is com- 
posed of the governor, the state auditor, and the state 
treasurer, acting ex officio. The sessions of this 
committee begin on the first Tuesday in September, and 
may continue not more than twenty days. The committee 
is required to "classify all property, real and personal, 
and to raise and lower the valuations of any class of 
property in any county to a value that shall be equal and 
uniform so far as possible in any part of the state, for 
the purpose of ascertaining the just amount of taxes due 
from each county for state purposes." 

The State of Washington has found it difficult, 
for various reasons, to develop and adhere to a consistent 
policy of centralized tax administration. The following 


resume of the history of the state tax administration since 


yas yo beatuset Weapaang {snoatsq sat to exlsv stsgetags 
beecoass as eulev oft tact aovetied ti tevotedw isubivibak 
e89e80gTNG nottaxe? tot eulsv tist baie ound ont tot 7 
tenwo yns of sev bs ed staum ‘gait iaw nt ‘eokt ort eysb ovlt 
ed Ysn sasotont as etotsed ytisqoid Isnoexsq 10 Iset to 
| | | soulsv boansses odd at eben 
.besitsups roctw pactinwoo ont tot effor xsi ent 

edt ot molaeimdye tot rot tbus etste vent ot pebtawiot ots 
. -moo al ‘eed Eman etdT ,osddimmoo notiastisups eiste 
stste odt bas tottbus state oss TOnrte ven odd to ‘peeog 
etdt to dugtesan oat .okottio xe suites .r9twesstt 
bas ,tedmetqoe nt yebeeuT tetLt odd mo mised sett tmmoo 
‘esdtinmoo eT  .aysb yoows nedd otom don ounttanco ys 
_fsnoateg bis {set ,ywttsqotq Ifs yYiltaes{[o" of bettupset al 
to easio yes to enotteulev od tewol bus eetet ot bus 
bas LIsups ed fisde ted? evisy s ot ytnwoo yas at utisqorg 
tot ,etste ont to tiscq yas at eldtecog as Ist of mrot En 
eub eexst to Sattome seu, edt guitnistisoas to ee oq ond 
| ",asacogtiug siste tot yinsoo doses mort 

:tIvolttib #t bowel esd notgaidesW to etet@ odT 
tnetateanoo s ot etenmbs bas qoLeveb of ,anosesst avolisv tot 
geiwoflot eat notsaideinimube xe besiiasiase ‘te yoilog 


conte moidettainiobs xed o¢ate off to yrodtaid edt to snwees 


43. 


the organization of the state government reveals the lack 
of clear-cut conception of the administrative problems 


involved: 


"When the State of Washington was ad- 
mitted to the Union in 1889 the general prop- 
erty tax had already been established as 
the basis of its financial system, The 
new state presented the relatively simple 
economic conditions which everywhere have 
proved the most favorable environment for the 
development of that system of. taxation. 
The original tax administrative organization 
was Simple and displayed the characteristic 
decentralization of real authority. The 
local assessment was in the charge of a county 
assessor over whom no central control existed. 
This officer had little reel authority over the 
multitude of deputy assessors in the tax districts, 
a condition which was highly favorable to the 
emergencies of the ubiquitous evils of under- 
valuation, evasion and discrimination in as« 
sessments. The statewide existence of these 
conditions was evidenced by the establishment 
of a state board of equalization in 1891. 
The duties of this board, originally composed 
of the secretary and auditor of state and the 
land commissioner, were transferred in 1893 
to the board of land commissioners, a body 
which had superseded the single official in charge 
of that department. In 1897 the legislature re- 
verted again to the original plan of 1891. These 
changes were due to the experiments that were 
being tried out in the organization of the land 
office. They suggest that the state board of 
equalization was not taken seriously and that 
considerations of convenience and economy, to say 
nothing of politics, took precedence over equitable 
tax administration. 


"The forces which brought forth the tax 
commission are difficult to trace. Wo evi- 
dence has been found of a strong public senti- 
ment such as has so often been the fore-runner 
and to some extent the progenitor of the tax com- 
mission in some other states. So far as can be 


vost oft efsevex tnommrsvog otdste ot To noltissinsaro ont 
ame l[dorq evitsisvetnimbs oft to nottqeonoo styo=-tsefo To 
:bevilovni 


bs asw notgnidesW to stste edt nea" 
-qotq [erenss sit C88L mi notnaU sdt ot botiim 
es betletidstes noed ybseuls ben xst yt1s 
oaT emeteye [stonenti ett to elasd ost 
s{qmte yIevitelst sat betnoesiq state wen 
evsd stenwyreve doinw anoftsttbnoo olfmonoos 
eis toty tnemiorivas sidsitovst seom srt bevoid 
enmoitsxst Io motaya tsct to sJnemqoLloveb 
notsjssinsgto avicsittetaimbs xst Isnigito saT 
ositetzxetositsio ont beysel[qatbh bans ef{qmlé esw 
edT . .ysitorius Iset to mnoltissiisiineoeb 
yiayoo s to spisdo ont at esw dnsmeasaes Le00l 
\ebeteixe: Lorstnoo Lstinso on modw tevoe Troaesees ® 
edt tevo ytitodstus [sex olttif bsd asolito etdAT 
,etoitsielb xst sdtontoetoeaseas yYsuqesh to sbutitinuim 
edt ot sf{dstovst yinetd esw dotnw noitibnoo s 
» etebns to elive esotiupids sdt to esloneg rome 
eas at nottenimitoaribh bans moLasve ,motisuitsv 
seedt to sonstaixs shtwesete sat eatnsmaese 
tusmiaaidstes edt yd beomebivs asw anotsibtoo 
eL88fL at motisxst{isups to bitsod ststa 8 to 
besogmoo Yf[lentgito ,bisod eidt to eetiuh ont 
edt buns etiste to totibyus bas yistetose sat to” 
SC8l ai hottetansrs stew ,tonoieeimmoo Sasl 
ybod s yetonotsatmmos bisl to birso0d sat (ot 
ogtaso of Isioltto efsynia ext bebsatogque bad doidw 
“ou stutelaigo£ edt VESL al © .tnomérsqohS ssdt O° 
seendT ~-f08f to aslq Lsenigixo exit od nisgs botisv 
stow tedt atnomineqzs sdt of sub sxow asgmsiio 
bast sdt to mottssinsgito odd at tuo bet¢at antoed 
to btsod state odd dads taoangue 'ySdT: -.soktto 
¢sdt bas yvlevotioa asiust ton asw aottsstisupe 
Yys2'ot ,Ymomooe bas gsomsinevmos to atotisrshianoo 
efdsiiupe tovo sonsbsoe1tg woot ,sottitioq to aniditon 
MOtisateininmhbs xst 


xsi ods dttot sdguoitd Motdw asotot ent" 

-ivo ov 90813 oF S{iyoltTib sts nolaatmmoo 
efinse offduq gaottea s to bnvot mesd esl sonsh 
toniwt-stot ods meed astto oa asd as dove tnom 

-m0o xsi sdf to totinsgotq sent tnstxe smoe ot bas 
6d NSO es tst o8 -2estste todto smoea nit aolteaim 


44, 


learned, no special investigations had been 

made before the board of tex commissioners was 
decided upon and the absence of a clear formu- 
lation of plans resulted in several years of 
piecemeal legislation in the effort to devel- 

op an efficient administrative body. To il- 
lustrate: The board of tax commissioners was 
established in 1905 and at that time was required 
to supervise the tax system, to assist in the 

state equalization and to administer the inher- 
itance tax. In 1907 the central assessment 

of railroad, telegraph, express end private 

car line companies was initiated and placed 

under the board's jurisdiction. In this year 

also the board was placed in charge of escheats, 
end in 1909 it was made an excise board with 

the duty of issuing and collecting for, the 

annual liquor licenses. The laws relating 

to the administrative euthority of the board 

of tax commissioners evolved only slowly to the 
stage of a clear cut definition of that body's 
status and functions, They had hardly reached 
that stage in 1915 when the legislature removed the 
tax commissioners from the state board of equaliza- 
tion, leaving that body composed of the auditor, 
the commissioner of public lands, and a member 
from the public service commission, This 

reaction toward a more primitive and clear- 

ly less satisfactory arrangement was only a tem- 
porary manifestation of the political struggle 

of which the tax department had been the center 

for years. The legislature of 1917 abolished 

the tax board and substituted a single commissioner, 
but returned him to the state board of equalization." 


Lutz - The State Tax Commission, 1918, 
pp. 352 - 353. 


The nominal headship of a state tax system 
is vested in a department of taxation and examination, 


which is in the charge of e director. This director is 


need bso anottsaitesvat Istooge on ,bontsel 

asw etemotasimmos xst to bisod sdt stoted obsm 
-umrot rselo s to eonseds oft bas moqu: bebiosd 

to atsoy LIstevea al betivast anslq to molisl 
-foveb ot Sxotte ont nt notteleigel L[semeooig 

-~ff of eybod evisciseinimds gaetofTto as go 

asw atenobeatmmos: xsi to brsod sr setsatayt 
hetitupet aswoomis sedd gs bua GOCL af: bopalidstes 
ont mi Sateas of .moeteye, xst ont sativerequa ot 
-rotini oot astatnimbs ot bas mottssiltsups stata 
toomaesees Istinoo soit) WOOL al xsd gomatt 
etavitc bas assigxe ,dqstgelot ,bsotfiat to 

* besvsalq bas betsittat asw estnsqiaos omit tso 

ms9y eins al etoltothbaius, ea'brseced ont tobay 
.atsorloas to sgredo nt beosiq asw btsod ols oats 
dtiw bxusod setoxs ms ebaa aesw tt QOCL at bas 

ont’ ,tot gaivtoslioo bus gniveek to ytub ont 
gnitsist ewsl oT -scansotl toupll Launns 

bisod odt to ytirodtus evitsitainiohs st ot 

ent ot yLwole yino bevfove etemoleainmoo xst to 
a'ybod ¢sdt to motsinttsb duo tsefo s to sgste 
berosst wlbrsdi bsd yedT earottonst bas autstse 

eit bovonet siutsletgsl sdt nonw @LCL ak sgsta: dst 
-ssiisups to bisod stste ont mott atomoieeimmoo xsi 
,totibyus sft to bosogmoo-ybod s¢sdt snivsel ,.naolt 
rodmem s bis ,ebnst oftlduq to tesmofLeatamoo edt 
afidt etolsatmmnoo sotvise otidug ont mort 

-tssio bas svitiming stom 8 Srawot mottoset 

-tot s vino esw inemagisits ytotostatisa easel yt 
efanuite Lsottifog sii to nottstestiasm yrstog 
atotne9 odt meod bad snomtisqeh xst odd dofrlw ‘to 
bettetiods Viel to stutslatgel sAT 2e2TSSY Tot 
,Temotesinnoo sigate s hetutiteduye bua bhtisod xst edt 
",sotissif{ssps to brsod stste ont ot mid bentutet dud 


{SL0L (ndiaeinmod xs? ovste oT = stud 
.888 ~ S@S .aq 


mos ays xt ofste s to aidebsont fsutmon ont 
 moitsntatisxe bas notisxst to dnemtisqeb s ai boteov al 


at totosrib efat etotostib s to egtedo ont at et dotdw 


45. 


appointed by- the governor with the ‘consent of the Sen- 

ate and holds office at the pleasure of the governor, 

The director of taxation is required to “secure valuations 
and keep a record of valuations of all classes of proper- 
ty, real, personal and mixed, tengible and intangible, 
throughout the state", and for that purpose to "reguire 
of all officers, examiners, inspectors, assistants and 
employees of the department of taxation and examination, 
and of all officers and employees of other departments of 
the state government. whose work makes it possible to as- 
certain valuations, the filing of reports with the depart- 
ment of taxation and examinetion, giving information as 

to such valuations and the source thereof, to the end that 
there shall be on file, for the use of the state equali- 
zation committee, information as to property valuations in 
every section of the state." 

The director of taxation is also given the power, 
exercised by the former state tax commissioner, of general 
supervision of the taxation system, including general 
supervision of assessors and county boards of equalization, 
conferring with, advising and directing assessors, boards 
of equalization and county commissioners es to their duties 


under the law, and the direction of the proceedings, actions 


-19e oft to tusenoo odd Atiw tomtovog ont yd. botulogas 
stomtevoa eft to etuesolaq edt. te eotitto ebLod bas ots 
anotisulsy etyosa" of betiupet at mottsxst to sotosttds oA? 
-teqotq to e9aeslo [fis to enotssulsy to b10091-@ qeed bas 
.oidianstat bus eldignsd..bexim bus Isnoateq ,feot . vt 
etiupst" ot saoquug isas aes bas ,"ostste odd tuodgsordt 
bas atastsiczas ~etotosgant ,atenimsxs ~ateottto {fis to 
,sottenimexe bus nolisxst to tmemtusqeb oft to eseyolame 
to atnemitsqeh tonto to assyolgme bus eteottio ffs to bas 
-ss ot eldtasoq +i eexdsm Axow seodw dnemrevog otsta odt 
-tisqeb odd diiw ettoget to satLtt odd ~anoitsutev aisti99 
as nottsmtotat gntvis ,nottsntmexs bas moitsxes to ¢nom 
todd haesaldcot »tostent sotvos vet bus -enottsuLlsy tiove of 
-Liaspe ejstea edt to 9au edt toteLltt m0 ed Lisda etodt 
at enoittsylav ytisqotq of as moltsmrotnl . gett tamoo nottss 
",otsta ott to sehdene rexeve 

.t9wog oft movig oels et nottsaxss to togoathb ext? 
Istoneg to ,wsaoteeimmoo xst otsta romtot sft yd beatotexe 
Isienes gnibwfont ,medaye motisxst edt to motetvroque 
totissiisups to abisod yvinvoo bas etoeaseas to motetvisoquae 
ebtsod ,etoaresess gnifostibd buns antetvos ,diiv gnirretmoo 
esitub tledt of es atomotaeimmoo yinwyoo bus nottsxiisype To 


enofios ,agnibssoo1iq sft to moitoetib edt bas ,wal odd tobny 


46. 


or prosecutions which may be instituted for the enforcement 
of tax laws. He is also authorized to prescribe the books 
and forms to be used in the assessment and collection of 
taxes, to summon witnesses in any hearing on the subject 

of taxation, to visit the counties for the investigation 
of the methods used in the assessment and equalization of 
property, and to investigate thoroughly all complaints 

made to him of illegal, unjust or excessive taxation. 

These powers of supervision were construed by the Supreme 
Court to mean something more than mere advisory oversight 
in Great Northern Railway vs. Snohomish County, 48 Wash., 
478, but the decision lacked authority since the law did 
not provide an adequate means of enforcement of the tax 
- commisaien bs order. 

It.is evident that the state does not have, at 
present, a sufficient degree of administrative centrali- 
zation to achieve the best results in the assessment and 
equalization of property. We shall outline in a later 
section of the report our specific suggestions for the 
correction of this situation. 
5S. OPERATION OF THE 
WASHINGTON TAX SYSTEM: 


(a) Real Estate: The aggregate assessment. of 


Od 


tnemoototns silt tot betwutitent sd ys dotdw enoituoseotg to 
axood etit-editoesty o¢ besttoitusioels al oH  .awsl xst to 
to mottooifon bas ¢tremeasaes oft ak bhoauy od of amrot ons 

. Sostdue odd no gnirsod yas at asasentiw momma, ot .asxat 
noitsgitesvat ext tot astinuoo odt tieiv ot .mcitsxst to 
to mottsstisups bas snemeaeares odt mi hoay ebodien omy to 
atnisigqnos Lfs yisigquotont esapgiteevat of bas .yiteqoig 
etoitesxst evieasoxe to tevinw ,.fsgel{[i to mid o¢ sbsm 
emetque@ sit yd bouttanoo stew aotaivieque to aiswog 9seedT 
sdgiarevo yroaivbs once asdsd stom guintemea msom oF S100 
~eflesW 8 .ytmuod daimorsto ev. yswitsh atedito~ tacxD mi 
bth wef ont eonte ytttontus bexosl motetooh odt sud , 8S 
xst ont to ¢nsmgototns to ansem etsupohs as sbivota ton 
“» TODTO edadnabemne 

ts ,oved tom asob- otste odd, Sadi stnebtve ef tI 

-tisitinso ovitsiteinimbs to setg9b taetollive s ,cdnsestq 
bus tnuomaaceas odt at eftlueot teod ont evotdos ot motiss 
sotsi gs mt sntitvo [isde oW.. .ysteqotq to molitssilsups 

ont tot emottesague oftbooege so sroget els. to moitoee 
enottsutba eidt to moltastires 


aut GO UOITARAGO .é 
Ye “AT WOTOLINGAW 


, Ps. 
~ we 


to tnomaceeas stsgstggs oT . :gtsd sef »{s) 


47. 


real estate from 1910 to 1920 by the classes as established 


by the state board, is shown in the following table: 


REAL ESTATE ASSESSMENT 1910-1920. 


Timber Lands 


Other Unimproved 


Lands 


Improved Lands 


Improvements on 


Lands 


Town and City Lots 


Improvements on 
Town and City Lots 


Total, Lands. and 


Improvements 


$76.5 $% 89.4 


1918 1920 


$82.2 $100.6 


70.1 78.1 
158.9 aa 


54.1 40.8 
237.5 248.8 


1355.4 1535.5 


$678.8 $729.8 $742.1 $701.7 $718.1 $520.2 
‘ 


i 
(Compiled from the reports of the State Board of Equalization) 


These figures suggest the conclusion that the 


assessment of real estate in Washington has been unequal 


f 
and inequitable as among the different classes of real | 
' 


that the constitutional and legal rules of assessment have 


property. They also afford grounds for the conclusion 


v2 


beretidstas as aseasto oat o OSeLl ot ofer mort etetae Leer 
:9fdst antwollot ont ak oworle et ~otsod state ont we 
.IIV Isat | 
LOSCL-OL05 THMMEZEDeA MTATAR TARR 
| (anotitins) | ! 


SOL Bfer afer bfeL SleL Of@L ta 


i . hevoteminU rodto 
eT £.07 8,390 S,ed 8.89 4,69 abas.t 
eer @,88L O.f@f @.Sel 3.08f S.0aL abasd bovotamt 


ao atnemevotqml 


Ob £.h0.. 3.889 LoPS son 8saS &.fS abast 


Bas é.%ES &,8éS €.038 &.@as £. T0S ato. ytiiO Sas mwot 


y : t mo avnomevotqml 
cel &,.ecéL S.essf €.38sf @,éSf S.OLL atot ysidO bas awok- 


es re ee 


bas ebsmsl Let of 
OSes L.8LTS WoLOTG  L6Sa%Y «6, eSTF 8. 8TSg atmomsvorqal 


(moitesifsypi to brsod etst2 oft Yo astoget .odt mort beLiqmod) 


edt tedt motawLonoo ond s¢aongue soteatt seont 
fsupenu ased asd notanidesW at ststas Iset to duome2928s8 
{Isst to adeaslo tnerstiib odt gnoms*es sidsttupsnt bas” 
ftoteulonoo ett tot abnvots brotts oels yent ett toeqota 


even tnemeesseas to eslut [sz0f bans Isnoksutitenoos sdt tscdt 


not been generally regarded. 

For example, the aggregate assessment of all 
lands in the state was higher in 1914 than in either of 
the two subsequent appraisels. It is doubtful if real 
property values in Washington were actually declining 
during these years of war prosperity, but if, as a matter 
of fact, the actual values of the different classes of 
real property were declining during that period, then the 
sharp increasesmade in 1920 were quite unjustifiable. 

The acreage of lands assessed reveals some 
interesting and significant variations in the decade since 
1910, as is shown by the following table: 

TABLE VIII. 


NUMBER OF ACRES ASSESSED 1910-1926. 


1910 1912 1914 1916 1918 1920 
Total Acres; 
22,148,000 22,965,000 23,612,000 24,173,000 24,638,000 24,984,740 


Acres Timber; 
5,628,000 5,006,310 5,057,000 5,128,000 4,710,000 4,588,914 


Other Unimproved: 
10,346,000 11,183,469 11,890,000 12,559,000 13,354,000 13,767,354 


Improved: 
6,173,000 6,395,422 6,663,000 6,485,000 6,573,000 6,615,617 


(From the reports of the State Board of Equalization.) 


The total acreage assessed has steadily increased 


-bebtszet YLisiteneg assed ton 

IfLs ‘to tnomeesags ‘sisgeta95 sdt ,elgmsxs t0T 
to toftie ai medt aLCL at torgid asw etste odd alt ebnsl 
Iset tit Iuwttduvob et JI |. afsatstqgs snoupeadya ows ot 
gointfooh ylisufos stew motanideasW ot aoulsv ytisgotg 
totism s as ,ti tud ,ytireqaota tew to aisey seedt gnizud 
to aseaslo suertsittib odt to eeutsv Isutos edt ,tost to 
ed neds polzeg sds gaiuyvb gutatfoob stew ytlisqotg {set 
soldsttitestaw ettup etew OSCL at obsmeesoront qrisde 

6moe elasvet beezceas abtsi to sysetos oT 
‘eonte sbhaeeob od nk anotistuisvy sisoltingte bus gaitastetal 
:oldss os yuleiae pe edd yd nwode! el es ,0L8L 

.IIIV GITAT 


-OSCL-0LeL dieategk cHHOA FO HeEMUM 


osel. SLler 7 arer S ier eL OLfe 
; E } sasroA LstoT 
OB .b8C,SS 000,850,dS 000,EPL,AS 000 ,S£3,ES 000 ,d8°@,SS 000, 8bL,8S 


stodmiT astoA 
las 882 ds 000, OLT, dS 000, 8SL,2 “0007 FSO, @ Of5,800,2 000,888,2 


evotamial sodto0 
bce, Tat, ef 000 ,A28,éL 000,086, SL 000,028, ff @dd, eer, tL 000 ,d4¢ ,0L 


:bevotqml. 
TLS, 518,39 .000,E%2,3 . 000,288,5  000,638,8 SSh,é8E,3 000, EPL,5 


(.motssstisup= to bisof stste sat to attoqet sav mort) 


beasetont yitbsete esd beeasaas egss10s Istot oT 


49, 


since 1910, Of this total, the acreage listed as "other 
unimproved lands" has also risen steadily but the acreage 
listed as timber lands has decreased by over 1,000,000 acres. 
This rate of shrinkage may be justified by the timber cut of 
the past decade, but the variation in 1912 is not explainable 
on such grounds, and the increases in the acreage of timber 
lands in 1914 and 1916 are significant. 

Again, the amount of improved lands listed in 1914 
was greater than that listed in any subsequent year, The 
United States Census Bureau reported 6,373,311 acres of 
improved land in farms on January 1, 1910 and 7,129,343 
advec on January 1, 1920, This is something like the 
reasonable and natural growth in the acreage of improved 
lands which one should expect to find in the state during 
the last decade. The assessed acreage rose rapidly between 
1910 and 1914, but in 1916 it suddenly dropped to a level 
from which it has not yet recovered. 

We have here a condition which can have no excuse 
or explanation except in the decay of effective central 
administration over the tax system, The most violent changes 
in all of these assessments occurred in the days when the 


old tax commission was going to pieces. The marked aberrations 


tedto" as betel sgsetos oft ,Istot eatds 10 .OLfer eonte 
eysotos edt tud vitbseta nsetit oefs esd “ebasl boevorqainu 
289198 000,000, tevo yd beassto9b asd abusi tedmit as petatl 
to tuo xrsdmit odd yd bettiteust od ysem abate} uta to ots atdt 
eldsaisiqxe ton at SI@f mt mottstisy odd tud .9bsoeb tesq oxit 
todmit to esgsetos edd at eeasstont est bie ,ebnuots nove mo 
eSneolttinglea ots Of0f bas ALCL at abasl 

LOL nt hotati abnsl bevorgmt to tnyoms odt ,atsza 
ed? .tssty ¢aeupoadue ye at beteil tedt oedd retsets asw 
to asros ILS,E%E,a bodtoqet wsets atiansD astste betinav 
“ESS, OSL, bas OSL .I yreuast mo emrst at bust hevotqmt 
end ext gnidtemoe ak eidT  .OSCL .L yrsunst no 29T0e 
hbevotqmt to sgyset0s edt at dtwoty Isivisn bas el{dsnoesst 
gatiub stats ont nt batt of fosqxre biwuode sno Mofriw ebasl 
‘neewted vidlqst Saot sgset0s boeasaes soit” “yebsosd taal ont: 
“Yavel a of beqqoth yinsbbye tt fel nt tud .BLeL bas OLer 
-hetevooer sey ton asi $i dotsiw mort 
sayoxs on over aso doirw moitibnoo s sied svad oW 
Istiaso svistoolts to ysosb ont at tqeoxe tot ares ro 
segnsdio tnelotv ssom ofT . «meteye xat edt ssvo moitsiieiatmbs 
ent nonmw aysh ont at botivos0 atnemeesees saedt to ifs at 


encitetrads boxtrsm oT .2900stq ot patos asw motaetmmoo xsd blo 


50. 


in assessed valuation which accompanied the decline and 
disruption of the tax commission resulted in great inequal- 
ities of tax distribution, some of the effects of which 
are still evident. This disastrous experience should 
serve as a warning of the unwisdom of interfering with 

the orderly procedure of tax administration. 

Another by-product of the system of inadequate 
supervision of assessments is the failure to secure the 
immediate listing of lands clear listed for patent by the 
state and the federal government. These lands are taxable 
to the individual after the order has been given to issue 
the patent even if the patent is not actually issued for 
some time thereafter, It has also come to our attention 
that large tracts of railroad grant lands are not listed 
for taxation. These lands cannot be listed until they 
are surveyed, and the survey requires the cooperation of 
the railroads, the state and the federal government, In 
the past the railroads were not always willing to have the 
survey made, since there was no market for the land at the 
price established by the government. Now that this mar- 
ket exists the roads are anxious to complete the surveys 


and in some instances the railroad companies have had on 


0G 


bas entfoob oft betnsqmosos doldw nottsuisy beaeoass mt 
Dpreeht tsetg at betivest motaaktmmoo xst ont to moitqutatb 
| doktdwito atootts edt to smoa ,motiudiistaib xsi to asistt 
| biluote sonslroqxe eavotiasetb stdT .tnobive {f{ite2 ots 
dtiw gaizetresat to mobatwnsy edt to gointsw 8 88 9VT9a 
emottsitainimbs xst to erybesootq yLuebto ot 

stsupshsat to metaya ont to touborg-yd todt omA | 
edit ruse ot otulist odd at admeneasees to molaivisequa 

eit yd dnotsg tot bosatl xseLo ebasl to gaiteti etatbomut 
efdsxst 91s eabasl east etnomntevog LIstobet ont bas ststa 
eueak ot noviy na9d esl tebyro edt ststts Laubivibat eds ot 
tot Seuaek Yifsutos tom ai taetsg edt tL neve snstsq edt 
wektredes rvo ot omoo oats asl $I etottssteds omks omoa 
betartl ton sts ebnsl tnst3 beot{[ist to atosit egist dads 
yeds Iftinu betaifl od tonnso abnast oaedT eMtoitsxst tot 
to molisteqooo oft eetiuper yoviue ont bas ,beyeviwa ets 
ai etNSMNITSvog Istebet edt bas etsta edt ,ebsortisr ont 
eds svsd ot gntiliw eyswis ton oTew ebsotlist oft tasq ont 
eds ts basil soit tot teatsm on aaw sted gonie ,sbsm yevise 
-tsm etdt ¢sdt woll etnomnmisvog edit yd beratidstes softe 
ayesvive ofS oselgqnoo of avolxns ets ehsor ot etatxe tox 


ao bed evec asinsqsaoo bsortlist ot geonstent omoe at Sas 


51. 


deposit for years with the federal treasury, the money to 
pay for their part of these surveys. The state and fed- 
eral governments should be urged to hasten the measures 
necessary to complete these surveys. 

We cannot avoid the conclusion, based on a con- 
sideration of these figures, that the assessment of real 
property in the State of Washington has been very inaccur- 
ate and unegual. Undoubtedly a considerable quantity of 
lands in the state has escaped taxation altogether, while 
the peculiar variations in the assessed valuations of cer- 
tain classes give additiona] confirmation of the deduction 
that very great diversity has prevailed in.the basis of 


assessment in the different counties. 


There can be no effective readjustment of the 
tax burden until these fundamental inequalities of assess- 
ment and equalization are corrected. Indeed, there can 
be no accurate determination of the actual extent, or even 
the existence of these inequalities without such readjustment 
and correction of the assessments. The first step toward 
the relief of any taxpeyers from a burden which they now 


regard as unjust, is the thorough-coing reform of the as- 


sessments. 


-fé 


ot yonom edt ,yiuasests Is1sbhbet odd dtiw eisey tot tiaoqsb 
-bst ons stave edit -ayevive seeds Io tisq tied? tot ysq 
asivasem sit netasd ot beguu od hbluode atnommisveg Sst 
-ayevine sass esolfgqmoo of yrseasoon 

~109. 8 mo beesd ,moteufonoo ont Slovs tonnso sW 
fox, to snomaceses ont sedd ,aetugtt seont to notserobte 
shi incall ytev aood asd notgatidesW to etsta edd ak ytroqoirg 
to ytisnsyp efdsiebtenoo s yibesduobav eLsupeny bas sts 
elinw ,rettegotis moitsxst, besqsoes mer etste edt ai abust 
“199 to emoiisutsvy beaesaes eft ni anocitelisv taif{yasq ont 
gottoubsb sdt to Holismiiisos fenoittbbs evig aseasto ais 
to atesd oft ak befltsvetg esd ytlerevibh tserg yrov sads 
eeottnuyos snetetiib sdt at Jnomeasezes 

eds 2.9 insusayibsot evisosits om sd mso otodt 
~ge98es to acttifsupont fajnomshbaut sesdt Livny mebiud xsi 
i390 9todt  beebal .bssositoo ote notissifsups bas trom 
fleve to ,snstxe [susos oft to notisnimisteb staiyoos on od 
taomteyibset dove tuodtiw sotitisupont ssedt to sonetatxe oft 

biswos getea stexit oat oad 90289228 ons i oitos oe) 

won yeas sho betw sohiud s mort atovyeqxst yas to totfor ont 
~2s od to mrotet gitoamdguotodt oft ef ,Jauiay 38 bisyes 
- aimomo eos 


52. 


(b) Personal Property: The above conclusions 


covering the practical operation of the property tax in 
Washington are further sustained and confirmed when we 
turn to the results of the taxation of personal property. 
These results are sumnarized in the following table: 
TABLE IX. 
(Millions) 


THE ASSESSMENT OF PERSONAL PROPERTY IN WASHINGTON FOR CERTAIN 
YS@ARS. 


1906 1910 1914 1918 1920 1921 

1. Tangibles: > oe ae 

1. Farm Animals 25602 519.525 20650626 .291 2649. 19.2 

2. Vehicles 2el 4.1 6.9° 21.57% 34.26 36,0 
3. Household,Personal, 
Office,Musical In- 


struments 1138, °26.2 27.4° 2534°°26.8'' 27.4 
4, Tools,Machinery, 

Steam Vessels £O.0°8°1807-22007 ©22.3°°341S°°33.9 
5. Materials, Manufac- 

tures,Merchandise 21.2) °33.6'°4142. 50.2 82.3 72.4 
6. Personal Property of 

Public Utilities 18.6 968 ©“16G2° 1739" 22,.6°°23.1 
7. All Other Tangibles 5,8 11,7 8.4 529 Pr) 6.1 

Total Tangibles 84.5 123.4 140.0 169.6 233.9 220.3 
2. Intangibles; 

1. Money & Credits of 

Bankers, Brokers 4.8 12.5 oo - - - 
2. Moneys Sel Lee Pr) oe Pp i 08 
3. Notes,Accounts 3.0 = - ~ - - 
4, Bonds, Stocks, Shares sa oD 12. G2" 224 6 14,5 1838 


5. Royalties,Patents Se Ris Fl OF tat FE | ~ - 
Total Intangibles 4337 15.4 14.5 14.8*,14,6 15.9 


3. All Other Personalty: 1.8 5.6 3540 1.4 1.5 1.8 


Total Personal Property 97.9 142.4 157.7 185.6 250.0 238.1 
Less Exemptions 17.1 350.9 32.8 28.1 


Aggregate of Taxable 
Personal Property: 80.8 111.5 124.9 157.5 250.0 238.1 


286 


anoteuylonos svods sXT 


tysusqgotT fsnoatst 


(d) 


ai xet ytreqotg odt to mottisteqo Isottosig sdt gnitevoo 


ew nedw boarrtinoo bas benisteva teddivt ets notanidesW 


e“ttsqotg Isnoersq to motisxss ent to ativeot odd ot atus 


:eldst antwoflot odt at bestissmwme.sots aetivest saodT 
. xe SETA rt 
(anotil bt) 
MIATAGO AOL WOTOMIHGAW Ul YTASIOAL JAMOeHaT TO Tiiieskeea GT 
| + SHASY 


{sel oser Brel arer ofer 3a0eL 


§,e@L° @.6S* "S.88" &.0S "G.eLr O.ck 
0.86 3.85 YF.IS 2.29 f. £.S 


&.¥S 8.08 3.cS8 &.9S &.58 8.i1L 


0.0L 
§.fS 


8.c6 
4.sv 


6.46 ESS Y.0S T.8L 


6.88 S&.0¢ S.fb 5.c6 


I.eS 9689 ONL dL 8.0 8.8L 
£,2 5.7 G6 3.8 Till 8.6 


€.0S8S 0.268 6,0@6f 0,0aL 3.681 3h8 


- ~ - Gc. &.Sf..8, 

80. ee as c. Gert A oy 

~ 2s on $e ~ - 9.6 

8 GL G.hf : OSL O>-SF a. . ves 
- - af SL ff L. 


Sf Gel  a.f 0,6 3.6 sel 


£.8€S8 90,068 3.68f V.VEL d.SaL ©.Te 


£.8S .8 Se , 0,08. £,'L 


£,8§S 0.068 c.Tel ©.$Sl c.Sil 3.08 


eee ee ae, 


:aelidisost .f 
efemink orst I - 
eelotdey .& 
.fsnoated, blodsevoH .é 
eaI LsolewM,softto _. 
adnosausrtte 
eVteatdosh,eflooT .d 
alsaesV mssica 
~ostunsh,eflsitetsi .¢ 
sethnstoroll, aotut 
to ysrsqotl Isnoered .9d 
egittittv ofldyT 
aslidigasT «corto Ifa .° 


agsidtagnsT IsioT 


aera 3 
to eadrbet “yonom .L 


atoLotd, etoutnsd 
ayenol sS 
atnyoooA,astol .& 
aertede, atoote ,ebaod oh - 
atmoted, sett Leyor 2G 


eeldisnstaI [stot 
:ysisnoered r9sdto [fA .é 


ytteqoti Ismaoere{ LstoT 
anotsiqmexd eas. 


s{dsxsT to ostsget3 
:ystxregotd Isncaret 


55. 


NOTE TO TABLE: 

The tax law provides a long list of separ- 
ate items, 51 in 1921, for the listing of personal 
property. These have been grouped together in 
the. above table. Bank stock was reported with 
the moneys and credits of bankers until 1912, 
Beginning with 1914 the item 'bonds, stocks and 
shares' includes bank stocks only. 


i Is Tangible Personal Property; 

It is not possible to check these figures at 
every point with data obtained from independent sources. 
The federal census valuation of live stock on farms, as 
of January 1, 1921, was $82,292,072. If we assume a full 
fifty per cent assessment two months later, the assessors 
were $15,000,000 below the census valuation. 

A comparison of the federal census count of the 
different classes of farm animals as of January 1, 1920, 
and the count made by the assessors two months later in the 


same year is illuminating: 


TABLE X, 
Class of Number reported by Number assessed on 
Animals Census, Jan.1,1920. March 1, 1920. 
Horses 314,740 244,711 
Mules 24,338 19, 321 
Cattle 605,553 445 ,566 
Sheep & Goats 654,115 585,543 


Hogs 264,747 121,817 


cc 


LIdAT OT STOW 

-tsqee to telf{ gnol s Gakivets wsl xst edT 
{snoeteg! to gaiter£ odd toto ISeLl ak Id, amett ots 
ai tesliszsot hbequotg nood aved seedT eUtr9qoI1g 
Stiw betatoqe: esw Xoote anise ~eidst evods st 
~SL@Ll L[tinw erexmed to etihoto bus eysnom ond 
bas exoote ,ebnod' moti odd ALCL doiw gninniged 
eYino atootea Ansd aehbuloni ‘aetede 


rystocots Isnostet efdinnstT «1 
te aoupgtt seemt Axoodo ot eldieeog tom et 31 

.B9otuoe, tnohbuecebnt mort benisédo steb dtiw tniog yueve 
as ,amrst mo Xoota evil to noitenisy evsenso Letebet. eT 
“fiwt,e ommees ow.tI ,STO,SeS,S6$ caw 18@L 4 UTSLEET To 
etogesees orit ,tetel entuom, owt tnemecoess du90 19¢. yttit 
enoitsruisy everes ont woLed 000, 000 ele Stow 

orig, to tooo avarso Lersbet elt To neetipgscs A. 
(OSer .f Yisunst to as afantns mist to eoaaslo tnetetttb 
‘ent mt retel adémom ows etoeesese oft yd obem tnuoo ert bre 


:gckieniowllf ef tsey omsa 


no boesesees Todi yd beizouen sodmuu -- os to eeslo 
a _~OS°L f gore 20S8l.f. 1st . even Li? fey BLS 
ILT ASS) | OST O16 — BeetoH 
{Sé ,eL BEE, SS eeLuM 
ddc coh ' Ede ,e038 efits 
6h2 38d ; vr dh eee etson & qsede 


Tl8, {SL ) oF8T, 80S. ) ego 


54. 


There were listed for taxation in 1921, 137,171 
automobiles and motor trucks, and 1389 motorcycles, The 
secretary of state issued for the year ending February 
29, 1920, 173,934 licenses, and in that part of the next 
fiscal year ending on September 30, 1920, 188,092. The 
bulletin of Descriptive and Statistical Information for 
the year 1921, issued through the office of the Secretary 
of State, contains the statement that for the year end- 
ing December 1, 1921, Washington had 192,484 licensed motor 
vehicles, These figures do not allow for duplication. 
due to sales and transfers of cars, and the losses through 
accidents, The secretary of state estimates that about 
30,000 licenses are issued on duplication, but after making 
this allowance it is evident that there are several thous- 
and motor vehicles untaxed in the state. The average as- 
sessed value of automobiles and trucks in 1921 was only 
$276.43 and of the motorcycles, $65.70. Doubtless, many 
of these untaxed cars escaped through the $300.00 exemption. 

Agricultural implements, farm machinery and har- 
ness were listed at $3,534,116 in 1920, whereas, the census 
bureau reported a total value of $54,721,377 for the in- 


plements and machinery on farms on January 1, 1920. 


IVL,. SEL [SCL mk nottsxst uct betetl etew stedT 
eaT ae loyotos om eC8él bus ,axtourt totom bas aelidomotvue 
visuidef gnibns isey eft tot boveal etste to yistetose 
txen odd.to tisq tsdd ni bos ,esemeotl bo@,EVL ,OSeL .es 
enT oS@0,88L£ ,OS@L ,0é nodmedqe2 fo gnibnes tsoy Isoelt 
not notdsmrotel Lsotvettste bas evitqttoeed to atteliud 
yisisto9e ott to eoktto edd dguonsdt bouect -fSOL assy ost 
‘ebne rsey oft tot tsdt tnomedste onlt enistico otste to 
rotom béeneotl bes .S@f bat notentseeW ,[S@l .f£ tedmoced ont 
.Mofssotiquh tot wolls ton 6b setugit ceedT  .eslotdor 
davotwtt esaeol eft bus ,atso to eretasesé bas eofse ot sub 
tuods tert aetsmites siste to yissetoes edt ,.etnsbtoos 
gnictem tstts gud ,notisotiquh mo boweel ests esanmsott 000,08 
-auvons Isisvee o16 otent tedd tnebive at ti sonswolls eid 
~es ogstevs oNT .oetste ot at bexstay esfotdey totom bas 
yino asw [SCI mi axouxrt bas eolidomotus to sulsv Seeese 
ytam ,eeostiduod .O.G08 yesfoyorotom sit to bas Sh. dTSe 
etoitgmexe 00.008@ ort mysroutt beqsces e1so bexsiny seest to 

~ased bos Ytenidnosm arst ,atnemelgmit Isiviivoltsa 
evenso oft ,esstendw ,OSCL mi Off boC,eo% ts hotell stow aeen 
-mi oft tot “'VE,IST,d8$ to oulsv Istot s bettocer userud 


-OS@L ,f yisunst mo amtst mo yiontdosm bas atnemel¢ 


55. 


Similar discrepancies occur in the range of aver- 
age valuations of farm animals. For example, the assessed 
valuesof bulls for breeding purposes were equalized in 
1921, at $18.33 in San Juan County; at $25.07 in Skagit 
County; at $21.97 in Thurston County; and at $356.00 in 
King County. We are advised by stock men that the same 
breed of cattle are found in all of these counties. Again, 
horses three years and over range from $16.24 in Thurston 
County to $39.75 in King County. Milch cows are assessed 
at an average of $21.01 in San Juan County as compared 
to $36.50 in Pierce County. The average automobile as- 
sessment varies from $100.40 in San Juan County to $308.30 
in Walla Walla County, and pianos range in assessed value 
from $42.77 in Wahkiakum County to $109.14 in King County. 

It is a matter of common knowledge, which has been 
effectively demonstrated by every day observation as well 
as by definite tests in other states, that the tangible 
personal property of farmers is much more effectively and 
accurately assessed than the personal property of merchants, 
manufacturers and large corporations generally. We have 
made no tests of the assessment in this state of the 
latter classes of personalty, but it is not difficult to 


imagine the inaccuracies and inequalities which must prevail 


ce 


-t9ovs to epns1 oft mt tyoo00 estonsgotoelbh rslimté 
beceseas Odi ,slqmsxo 107 eefismins mist to enolisuisv s3s 
“xt besiiIsups e1oW eesecgqiug piibsead tot elfiud toautsv 
‘ tiyete AE Y0.8s¢ te sydnurod neut nee nt 68,818 ts LSer 
nt 00,086% ts bne sytnvod notewdT oi VO.ISé Je :ytmwod 
oitee ont tacit nem Aoote yd beetvbs Sis OW «VsnveD gnik 
.atega .2ettnuos sacdt to Ife nt bavot e1e elites Re heed 
notersi? mi DS.aLe mort Sone novo bis BIAOY anus aootedt 
boaeseas ote awoo soli .¥snwo0d- gain ot ¢7.€& of ytnsod 
betsqmoo es yinsod neul ase at [0.{[88 to egstevs as ts 
~ae eitdomotus Sgetevs of? .ysnvod sotefT oi 06.98% oF 
08, 808% of Utd nevt os@ nt Ob.0OL mort estusy dromacoe 
eulsy boessees nt egnst eonstg bas ,ysnuod slleW sifew nt 
sudnod gtx mt 2L.90L8 of ysawod msixdeW of VT.SS3 mott 
need ead Moisw (ogbefwonx mommoo to tettem s et a 
Ifsw es hotdsvteado ysb yisve yd botsrtenomed ylevitostte 
eldignss oft tet ,estste toto nt atest etinited yd as 
bras ylevistostts etom doum ek etomist to Ysxisqor¢ Isroeteg 
,eatnantorsm to Yroqoté fsnoersq sit msdt beeesees vlesstwoos 
oavsi sW e(ilsisneg anoitstogtoo saast bas erstutostunsm 
“Sit “to ofste eft at tnomecoaes odd to ateet om obsat 
ot diworttib ton di tk sud Utisnoered to eeaasLo rettal 


ftsvetq teum dotdw seltifsupent bas eseetostyoosnt oft sninemt 


56. 


in the assessment of personal property in urban centers 
in the light of the conditions which have been found in 


rural districts. 


> Intangible Personal Property: 
The table above shows that there has been no 


change in the amount of intangibles assessed since 1910, 

and also the vastly more significant fact that no attempt 
is made in Washington to reach the great bulk of the intan- 
gible property of the state. This effort was discontinued, 
and the general property tax thereby abandoned, by Ch. 

146 of the Laws of 1907, which excluded mortgages, notes, 
accounts, moneys, certificates of deposit, judgments, 

state, county, municipal and school district bonds and 
warrants from the category of property for the puspose of 
taxation. 

This statute was tested in the courts and upheld 
by the Supreme Court except in so far as it applied to 
moneys, which, in the language of the decision, "possesses 
such value by way of immediate purchasing or exchange powers 
as in effect robs it of a mere representative character 
and clothes it with the dignity of property having intrinsic 


value," (State ex rel, Wolfe vs. Parmenter, 50 Wash., 164.) 


ersénso nsdts ak yitoqote Lsmoetegq to tnomessess edt mi 
ni bavvot resd sven dotdw emotitbrios sit to tdgif ont mt 


.etointetbh L[etur 


:ysazeqort Lenoeis eldtgastnl | 0S 

om seed esd otsdt tecld ewosle evods oldat oat 
,OLCL sonte beaseecs asidignstat to drusoms orft nt epnaedo 
tqmotts om tsdd sost tnsoltingle siom yltesv edt oefs brs 
emstak orlt to Lud tsetg edt dosot ot motanidasW nt ebam ef 
ebeunitmooaelbh esw ttoits eidt .otete sais To usreqota elfdia 
-f9 yd ,bonobusds ysousdt xed _yiteqorg Leronen exit bas 
.aeton 1 8eg83T Tom bobuloxe foidw ,TOeCL to awed osis to ost 
9sn ome bul, ght eoge> to nedsottitres . 2yerom ‘sadnuso9ce 
bas ebnod sotige th Loosoae brs Saqiolaum eutauroo otste 
to seoqauc outs tot ydtuesqotq to yronstso ent mott etnsiisw 
| stottexss 
bloedqu bag. atiuo0s ens ni betess asw etutsta elAT 7 
ot bellags tt es tat o2 at qeaxe Jig0D emetgue ends vd 
eeaessaog" eebaloed ent to esysupnel ot at essere _eyertom 
siewog egnedoxs to gntesdoiug ete tboumt +9 ysw yd sutsev dove 
astostsaso evitetnseetget stem s te 7 adox tostis ne as 
otentztnt anivect Lezoqorg to ustogtb edt dt¢iw ti essitolo Sane 


(.S0f ,.cesW OC ,redriomret .av stLloW ,for xo otad2) *. aakay 


57. 


Although this decision became, by virtue of the 
authority which issued it, an integral part of the Washington 
tax law, as a modifying interpretation of the’ statute, we 
are unable to concede the logic of the argument or the con- 
clusion to which it led. This argument is as follows: 

(1) The constitution, in prescribing uniformity 
of taxation, does not contemplate double taxation, 

(2) The taxation of property and of credits is 
double taxation. 

(3) Credits are therefore not property for pur- 
poses of taxation, 

There are two uniformity clauses in the consti- 
tution: one of these requires that all property not speci- 
fically exempted shall be taxed in proportion to its value, 
and the other is to the effect that every person and cor- 
poration shall pay°a tax in proportion to the value of his, 
her or its property. These clauses embody different con- 
cepts of uniformity and they are not always wholly consist- 
ent. The court chose the first rule of uniformity, and 
proceeded to hold that this rule was satisfied if all prop- 
erty were taxed once, In other words, it was held that 
the constitution did not demand, and certainly sHowld not 


be construed so as to cause double taxation. The court 


VG 


ent to sutitv yd ,emsosd motetoeb etdt siguort tA 
notanidesW odd to tisq Istzgetnt ne ett boweet csotdw ytiazonctus 
ew ,etusede adt to nolttsterqretnt gaiyiftbom s es wal pay 
-109 sdt to snomupis ort to ofgol edt ebeorios pr eliaee 29T8 
sewolfot es ef dnomupis ett bol tt doittiw ot mofanto 

ytimrotinus gutdimoestq ab ,moktudisenoo eit (L) 
,~nottsxst eldyob stslametnoo son esob ,moitaxsd To 

ei etiboto to bus ytusqoitr to mottaxs? oT» (S) 
ttotisxss ofduob 

«tug tot ytxroqotg dom etoteisds ots atksox10 (é) 
efoitsxst to esaog 

-idenoo. eft mk eoauslo yoimrotins, ows o1s orenT 
-toege tom ytueqoryg Lis sand eertupet eeedtd to eno, molds 
sulsy esti ot mokdroqoig mi bexst od [iste betqnexs yLllsoit 
-1t00 bons noateg ytove tant tootts ent ot at tonto ond bus 
2th to oulev ent of motsStogotg ai xst s ysq Ilede nottstog 
=foo tneirstiftb ybodme asaysio seedT -ytreqotq efi ro tori 
-tetenoo yvllonw ayswis: tom eis yodt buns ysimiotinuy to efqes 
brs ,ytimirotins to elut teartt et eeorio tiyoo oT » tne 
egotq fis ti boitektse esw olui eirit tant blo ot bebseoorg 
sent bio eaesw tk ,abtow tertoe al .©ono boxset susw ytte 
tom binoda yIntettes bois ,bnamebh tom bib noitustienoo sis 


tinoo sonT sMmoitexet siduch seuss ot ef ca boutteameo od 


58. 


did not recognize that so-called double taxation, if it 

be universal, involves no injustice, It did recognize 
that the evils of the general property tax arose from 

the fact that universal taxation of property and credits 

at a uniform rate was not possible, and that there was 
widespread evasion of such taxation. The conclusion 
which it attempted to draw from this argument is a complete 
non-sequitur, for it is, in effect, the conclusion that 
credits are not property for purposes of taxation. 

The decision brushes aside, as of no consequence, 
the constitutional authorization to deduct debts from 
credits. If the framers of this document meant that 
credits were not property, this is an empty grant, and 
the conception of property, adopted by the court imputes 
to those who drafted the constitution a deliberate inclu- 
sion of empty words in the organic law. 

We have here an instance of the folly of beating 
the devil about the bush. Both the legislature and the 
court wanted to recognize and deal with the taxation prob- 
lem of the evasion of intangibles under the high tax rates 
of the general property tax. The constitutional rule of 
uniformity stood in the way, and the court, in order to 


effect a solution, comes to the very strained - and to our 


tir tb .motisxss olduobh bel{so-oe tant esingooor ton bib 
esingooet bib cI ~ootteutat om eeviovat ,Isetsvimsu od 
mort sects xst ytteqcota Lereneg ond to eitve ens salt 
etibeto bus, ytreqotg to, notisxss Isatsvinn dadt toset ort 
asw ovens ists bae ,eldiesoq ton asw etet mtotian 5 te 
nsotaslonoo sat enottsexst dove to motesvs bsotqeebiw 
etelqmoo s el tnomuais eidd mort werb ot hbetqmotts si colfdw 
ted soteuLonoo sit ,tosette mi ,etb di tot .awitupes-nor 
-moitexst to sseoqivg tot yiteqoig, dom ets adiberts 
ooneupeanoo om to ae ,obtes eotlauid mofetosb sAT 

mott eddeb toubed ot nmoitssttoniue Isnoitudtitanos eds 
tect, ¢nsem dnemuooh eindt to atemstt odd TI’ .atibeto 
bog. ,tastg yiame as ak etrit .ytuogqotq tom stew atibero 
eetugmil sivoo sat yd betqobs..ysreqotq to nottqoonoo: sit 
-ulonl, sisusditeb s moitutitensoo ont betis2tb odw. seontt ot 
wel oimszto sit al. abtow yiqmuoe: to) rote 

gaitsed, to yLLot ons. to sonstenti ms s19M) oven eW: ?” 
elit bos otnstsleigel ons dto& sMeud edt cvods Iivehb: sit 
-dotg notsexst ont dtiw [seb bas esingosoet! ot hbotnsw staimoo 
asist xsi dyin ont. rsbas. eoldignssnt: to! nofesve. sdt to mel 
to sist Isnoitutitenco off  ‘sxet yttoqgotq Jsisneg oft. To 
os tebto at. ,tiwoo sft buns ,yswiond at boote. ystimrotiny 


10.03 bons - bonisisve.yiev edt ot eemoo ,moltuLloe s toetits 


59. 


minds illogical conclusion that credits are not property. 
The minority opinion very properly criticises this con- 
clusion as a violation of the lawyer's own conception of 
property. 

But in siezing this horn of the constitutional 
dilemma of uniformity, the court has entirely overlooked 
the other provision which calls for uniformity among per- 
sons and corporations in proportion to property. We do 
not criticise the learned court for its choice of alter- 
natives, but in our opinion equality of tax burden among 
persons is quite as important as equality to property, if 
not more so. It is obvious that reconciliation of these 
two rules is possible only when there is one universal 
tax jurisdiction, with no foreign corporations doing bus- 
iness in the state and no individual citizens owning secur- 
ities based on foreign property. Such a condition obvi- 
ously does not and cannot exist today. Some persons in 
this state may have all of their property in the form of 
mortgages on foreign real estate, or of the stock and bonds 
of corporations which do no business in this state. Many 
other citizens have a part of their possessions in such 


forms. The restriction of the tax system to the taxable 


-vtreqord ton ers edtbero sect ‘olewtonco Iestgollt aba timn 
“00 sins asefottiizo si i YISv Koledae ustronto: ont . 
to mots qoonoo rw e'xeynal ent to notteloty & es moteulo 
| Pe yrx ty Uiroqorg 

fenotiudisacco edt to maom atdt grtseta nt tua 
horloolisvo ylexritas esd tivo sat wud Ero ties to emmoeltb 
-toq proms ytimrotins tot efiso doisw notetvora tesito exit 
ob sW 3 =. ut teqotq of notttoqorg at enottetoytos bus ertoe 
etsiis to eotoso att tot doo benteel ont eetolvizo Jon 
gnoms nebaud xst to ytilsupe mofinigo oat) ot su cevitsen 
ti edie qotc ot utiteype es sostrogmt es ed Lup at anoersg 
eeert to mottsifiomoos1 sst evoivdo at tI .08 etom tom 
Isetovinn oo et otort rrestw qno éidteaoq ef aelur owt 
cand entob enotsstoqtos naierot of uttw ,aottotbetaut xed 
-tuo9e giimwo enesitito Isubivibnt on bus otate ont mt aeent 
-tydo nottibmos = Howe  .ydrseqota naiorot mo beesd asitt 
ai anoetsq emo@ .ywbot teixe #onns9 hen Fe esob yLlao 
to mrot ot ak ysisqoiq risdt 1° Its eved yen etese aids 
ebnod bus Asote orlt to to ofadae Iso ngtetot 10 cogent rom 
yosh ,otsta eicd ot esontesd om ob dotclw exoltszoqz09 to 
Soue nk anéleceedeg atont to sisq & Sve anesisio sertt o 


efdsxsi sit ot meteve xst orit To noLtolasest on? .emrot 


60. 


physical property located within this state is therefore 
a violation of the constitutional rule of uniformity as 
among persons and corporations, for the individual whose 
wealth is based on physical property located outside the 
state is to that extent exempted from state and local tax- 
ation, and is therefore being supplied gratuitously with 
all of the benefits and services of government at the ex- 
pense of the owners of real and tangible personal property. 
In seeking to avoid double taxation of this property the 
Supreme Court has impaled the state upon the other horn 

of the dilemma, inequality of personal taxation, and from 
this there may be no escape but by a constitutional amend- 
ment. 

In another respect this decision that credits 
are not property, produces an inconsistency in the tax laws. 
Credits are not property for purposes of the property tax. 
Yet the inheritance tax applies to "all property within 
the jurisdiction of this state, tangible and intangible." 
There may be adequate legal grounds for this inconsistency 
but it seems to us extremely illogical to use different 
definitions of property in two tax laws. Doubtless the 
laxity with which the present inheritance tax law is enforced 


etoteteds ef stsia aids nidtiw betsool yireqotq Leotaydg 
as ytinwetiaw to elut Isnoiiustivanoo oft to motislotv s 
seotw Laubivibct odd tol ,enotistogtoo bas enoateg gnoms 
edt ebletuo bessool ysasqota Isoteydg mo beesd eb idtisew 
-xsi Isool bus estate mott.betqmexs-tnstxe tend ot at stste 
atiiw ylevostiniatg, beilqque: gnied stoterent ef bas»,moits 
-xe oot ts tnemmisvoygz to esoivise brs atitened ont to LIfs 
-ytteqotq Isnoaisq eldignst bos [ser to etonmwo shit to sansg 
edt ytreqotq elnt to motisxst.e{duob btovs ot gntiasee alk 
miod todto odd mnogu essta old belsqmi est t2ryod ometqua 
mott bus ,motisxe? Lencetsq to ytiisupont.,smmel[tb st to 
~booeme Isnoliutitenoo s yd tud-eqeces on od yem otedd sind 
«toon 

etibeto tsdt mokfetoeb atdsd tosqasx tedions aI 
-ewsl xsi ont ai, yometetenooni ns asoubotq ,ysisqorq ton: ets 
xsd ystuteqotg skt to aesoqtug¢ tot ysireqotaq tom ots etibst9 
aicdtiw ysxreqotq Ifs" of estiqqs xed eonssizenat oft toy 
",oldiansial bas sldignss ,etste eidt to acitotbetiut esis 
youstaklaroont eins tot ebnuoig Isgel etsupebs sd ysem otedT 
tasrelifb say ot LIsofgpol{t viemertxo ew ot enmsoa tk tud 
edit aaeltduod eawsl xat owt ak ystoqotg to enotsiintteb 
beotoine ef wel xst sonusiitesint tneeenq ont doidw dtiw ysinel 


61. 


has prevented the question fromarising in the courts. 

It appears to us, 2s laymen, to contain serious possibil- 
ities for the scope of the inheritance tax should such a 
test suit be brought. 

The exception made with respect to money in this 
decision has been nullified by popular opinion, for in 
1921 there was returned for taxation as "money" the insig- 
nificant total for the whole state of $82,426, and at no 
time in the past seven years has the amount been above 
$300,000. 

The act of 1907 does not mention stocks aud bonds, 
yet this class of property has been exempted by popular 
opinion, and in recent years the assessment lists have not 
even contained a heading under which they could be listed. 
In view of the above decision respecting credits, this is 
doubtless a wise course, although it is impossible to con- 
cede that a share of stock is in any real sense a credit. 

We concede without argument the fruitlessness of 
the attempt to tax intangible property under the general 


property tax, and it is farthest from our intention to be 


understood as believing in or as recommending in this dis- 
cussion that the State of Washington should revert to the 


- £3 


eatrmoo ot at gateiwmort noltesoup ont betasverq vert 
-lidiezog avotise mistaod of ,nomysi se ,en otvetseqqs tI 
e dove binode xaet sonstitedat edt. to sqooe et 10t eeitét 
etigsotdsed tive steot 
eidt ai yenom ot soeqeet Atiw ebsm soliqeoxs: sdT 

mi tot ,molaiqo teluqoqg yd beitiiiua mesd- esd moletoeds 
-gtent oft "yonom" es notisxst tot henitwtet esw saodt [SOL 
of ts bie ,eSh,S8 to ststa slodw ont not LIstot tnsottin 
evods mesd tnvoms oct asd ersey never tesq oft aboomtt 
. | .000 0088 
. ebaod bas exXoots molfinem tom as0b SOCL tortoa oAT 
qwsluqog yd betqmexe neod asi ytisqotg to aaslo atdtotsy 
ton esvsd etetl tnomeesaacs ocd ertssy insoet at buns ,nointqo 
ebeseifl od bisco yest doldw tebnw gutbsed s bonistnos neve 
@f aids ,etiboto gaitesgest moletoeh evods oni to wolv ont 
noo of slidieaogmt el oti akewortis ,satvoo oatw s easliduoh 
tibet9 s cence [sot yas nivel aoote to .ersdacs: dedi ebeo 

to esensesltiuit odd Jnemwats tvoltiv sheomos eWos) 4 
fastens, oft tebnu ylreqotq sldigastat xst ot tqmetts orlt 
od ot motinotint wie mort geedtist et tft bis ,.xst ytteqotc 
~-etb eict mi potbnommoost as to at antveiiod as bootetshau 
eat ot Suovet Hivode notanitesW to stsete edt gett noteaso 


62. 


universally discredited plan of the general property tax 
whereby all intangibles are made taxable at hizh local rates, 


We do believe, however, that the state would have been in 

@ vastly better position if the Supreme Court had denied 
the validity of the Act of 1907 and had put squarely up 

to the people at that time the problem of so amending the 
constitution as to permit the development of a more flex- 
ible system of taxation. The legislature declared in the 
act which provided for this committee that real estate and 
tangible. personal property were bearing the entire burden 
of taxation. If this be true, it is a situation that has 
been created by the acts of past legislatures, and by 
decision of the highest court, in the policy of complete 
exemption of intangible property from the property tax 

with no thought or suggestion of alternative means of reach- 
ing the owners of these classes of property, and in disregard 
of the constitutional rule of uniformity of tax burden 
among persons. In a subsequent part of this report we 
shall discuss further some alternative step to be con- 


sidered as the means of remedying this situation, 


De Taxes on Corpnorations: 


We pass over without detailed commené the 


Sd 


eae ysxeqorg fetones oft to ss lo bettbetoath LLisetevtny 


g9tst Ssool min js eldsxst 9bsm S28 eeldtnnsint ifs xsexesiw 
mi nesd ever bilyow otste ods ‘tedt , teveworl ,oveiiod ob oW 


betneb best gtv0d emetqua oft tL molttieog zetied yitesv s 

qu ylotsupe tug bast bas YOCL to toA od To yYstbhtisv ont 

edt gatbroms oe to meLdorc edt omit tent te elLqoeq sic ot 
-xel[t otom py tremgofeveh ext ttmreq ot es mottutitenos 
edt mt bersflosb emuésletge. eat : emottsxst to moteys efdt 
bas ‘cade {set tsdit settimmoo elit tot bebiIvoiq dotdw sos 
mebiud ettine edt giitsed stew ytisqorg Isnoeteq oid inmat 
asi sat nottauthe s ef ¢f ,ouas od aint TI -aotiaxst to 
yd bas ,setmtslaigel tgesq te etos ont yd betaeso need 
etelgmoo to yorlog esit at ,d1u09 seeds id edt to sofetosb 
xst ytteqotq ont mort ytisqorg eidignetnt to nottcmexe 
-losst to BLS om evitecred Is to noiteesgue to tfawordt on dt iw 
bisasteib ai boas sXe 20 gerd to eseeslo sesndt To atonwo ot aot 
nebrud xst to ue torrot baw to olut Lsnoktuditenoo eit to 

sw dxoget aftnt to sits¢ dneupoedue & al eamoestsq R2noms 

-m00 sd of qote evissatests emoe tettivt sewoetbh Iisde 


snoitsutte est gniybentes to ansem oft es berebie 


:enotsietogtod mo esxst »..é 


ent g$nenmos belfstob stuoniiw 1tevo eesq SW 


63. 


filing fees for the privilege of securing a charter of 
incorporation from the state and the annual license fee, 
exacted from all corporations, for the privilege of doing 
business in the state. These license taxes are adminis- 
tered by the secretary of state, and we find no evidence 


to indicate that they are not well administered. 


4. blic Utilities; 

The facts regarding the assessed valuations of 
the different classes of public utilities, which are under 
the original jurisdiction of the state equalization comnit- 
tee sitting as a state board of assessment, are presented 


in the following table: 


TABLE XI. 
STEAM RAILROADS ELECTRIC RAILWAYS TELEGRAPH 
ctual igqualized etual Equalized Actual Equalized 


1910; 257, 405, 646: :100,157, 754: 37, 656,306: 715,878,548: : 767,770: : 298,845 
1912: 542,515, 593: 135,522, O77: 23,246, 683: 9,969, 343: 887, 625: 357,955 


1914: 542,157, ast 137, 538, 331; 49,211, 280; 21,565, 119; 887, 780: 562,939 
1916: 541,917, 939; 7138 ,652, 569% 45,462, —_— 19, 446, 493: 910, 994: 569,580 
1918: 340,502, 230; 138,355, 179: 43,718, 875: 18,702, 098: 767, 332: 310,774 


1921:337,651,363:136,165,576: 21,978,145: 9070 ,632:814,977: : 329,799 
Tpucet Sound Traction,Lignt & Power Co. (16,636,000 
acquired by City of Seattle - 7,675,900 


Western Washington Power Co. acquired 39,000 
by City of Seattle - 17,945 


to tetisdo s ynituose to epelivintg sit tol eest aniitt 
~99t senmooll faunas eit bas stsete est mort nolsstogtoont 
gatob to egelivitgq sms sot aF 803 S07 0g7 OP iis most betosxe 
-etnimbs ots eoxst sensoll seo? .otste exis mt eeorieud 
eonebive om bait ow bns ,etstea to yrstetose sit yd bores 


beretetnimbs f[fow ton ers yedt ssht etsoibnt of 


reottittiu otfdpg a” 
to enolttsulsev hoaecsases ont aitbisge1 etost oAT 
xShnu ors Uotdw ,eestttitiw otIduq to esaeesto tnoretttb orit 
-simmoo mottssifsups stste ent Io mottotbeltu, Isntgtito srt 
betnsestg eis ,tnemeeseas to bisod siste S 288 antittie ost 


:eldst gntwollflot sft mi 


- 1X BAEAT 
HUAAD GIT CYAWITAH OIATOTIT ECAORIIAA MALTS 
besiisiupa isto besitseups Leuts, bexits I 


ch8B, Ses; ory, VOY: SHE ,6VS,cL: 60E,080,%E foy VEL, OOL; One, 60d ,VeS;OLer 
cee, Yes; 188, T88: ERE, ede, 188, 8S ,.cS TO, SSé¢ ,céL; :EC8, GLE, She: :S1eL 


eee, Sdé; 08", va8: sell, coc, [S; :088, LfS es i188 BEC, v8L; TES TEL, SdS: bet 
O8E ,Cde; nee, OLe; :E8D 6bb, ef: 003d, gah, 6h 2082, Sa, bine eee, TIE Ld6; 8101 


ATT OLE; 988, For: TBO, SOF, SL: rave, grt, és rere, ccé, eel: 2088. S0é ,OSE; 6121 


** 


__ eer, ess: 182, A18:868,070,€ aL ,8Ve, 18 TONG GOL, 0EL:808, 180, 886: I8eL 


000 ,082,6f) .00 tewol & tcuid,noitos1T bayvoe tepug™ 
000 ,@T8,7 - olttsee To ytto yd boriupos 


Hered betiupos .00 towed nodantdesW ntotasW 
ése VL - aftiscea to ystio vd 


64, 


As a sumnary of public utility assessments this 
table is incomplete in that it does not include the tele- 
phone companies nor the electric light and power properties. 
These are assessed by the county assessors. This is a 
curious and hardly justifiable anomaly, for it is incon- 
ceivable that the property of a telephone company which 
extends over several counties can be adequately valued for 
taxation in piecemeal fashion by several different county 
assessors. It is equally inconceivable that inter-county 
or interstate hydroelectric properties could be properly 
assessed by the county assessors. 

A fundamental principle of efficient taxation is 
that large corporate properties should be assessed as 
units, on the basis of their value as going concerns. Ob- 
viously it is quite impossible to apply this principle if 
the assessment is made locally in the different counties 
by an official who can legally take into account simply 
the physical property located within his own jurisdiction, 
and who ordinarily lacks the facilities, time and disposi- 
tion to make a complete study of the broader elements of 
the problem, 

The figures given above show for certain years 


the actual and the equalized assessed valuations placed 


wdd 


elds esnomeesees yiifity olf{dyg to yrsomye ® BA 
-ols edit abivtent tom esob tt tent al etefqmoont at eldst 
getesedend tswog bos tdgil otatoste ond stom asinsqmoo snong 
8 ef etiT .etoeesees ytnuoo oft yd boeeeees sis seodT 
seoen’ ei ti tot ,yismons sldsiliten, yibisd bas evotxiyo 
Mdoidw yascmoo Siaciade cn & to ysreqote st tart oldeviso 
tot beutsv yletsupshs sd nso estinuoo Isteves tovo abnesxe 
ytauos sustetiih Istevee yd moitdest Isomessiq ni nottsexst 
ysouooersini tsdt sidsvisonoont ylilsups siI-st -etoeesces 
vfitsqotq sd bilyoo asistrseqotg sirsoslsorbynt otstersini to 
-etoeesees ytnuoo oft yo boecsecs 

el moitsxsd tnstottts to elqionizgq Istnomebaut A 
es beeesees sd biluote eotireqotq etsioqroo egret tsdt 
dO -amteonoo gulog es sufsv tiedt to efesd sot no yetiny 
tt elqtoniue ets Siyyaot aldzeq sant etiup ai.si ylevoit 
-eefsnuos JneteTith ouit mf. ylfsool obsm ek tnemecoeas ost 
Yiqute tayooos otmi srs ylisgsl asovodwelsefottro ine yd: 
Moltotbaitug, mwo eld aidsiw betsool yiteqorg Laeoteynig ott 
_-heogeib bas emit ,eettiiiost ot edosl yltrenibto -onw bas 
to ednomele rebsotd edt to ybute stelquoo 6 sism ot mort 
sme Ld ota orit 

etsey nisties9 tot wore svods fevig estuzit edT iY 


beoslg emotteulev beaeeces bestiaupe oft bas Lautoe ssit 


65. 


on the steam railroads, the electric railways, and the 
telegraph companies. These assessments were made by 

the state tax commission to 1916 and thereafter by the 
state board of equalization, Amarked increase was made 
in the actual assessed value of operating property in 1912, 
- but this aggregate has declined since that time, although 
the equalized assessed value has slowly risen on account 
of the changes in the ratios at which other property is 
alleged to have been assessed in the different counties. 
This use of the ratios alone gives a very great importance 
to their accuracy, and we shall present later our reasons 
for questioning their reliability. 

On the face of these valuations it appears that 
the state assessment of railroads in recent years has 
become rather a formal matter, The total equalized assess- 
ment of property other than steam railroads in the state 
has risen from $869,564,174 in 1912 to $1,041,673,664 in 
1921,- an increase of 19.7%, but during this period there 
has been only about half a million dollars added to the 
equalized valuation of the railroad property, or less than 
one-half of one per cent. 

The method of railroad assessment employed by 


the state board of equalization in recent years has been 


238 


odt bne (eyeawilst olrtoefs edt ,ebsotiist sisete ext mo 
yd obém stew atnemeesees cesT -estasqmoo destgeiot 
‘ens yd tettsetedd bus SL£CL ot moteeimmos xsi sisie eds 
ebseti asw sesotonk hettam A’ | .moltssiisups to bused sista 
SlOLo nk ytreqorg gnitsteqo to sxisv beacseas Leutos sdt ni 
Mavottis jomts tent sonte hontloeb esh otsgoetggs aint snd 
tnvooos mo meets yYlwole asd eulsev boaesees hest{sups ont 
at ytiseqoia wsdio dottw ts eotts:1 sit at asgnsdo odd To 
eastinuvos tnetettib sit at beeassas meed sven o¢ bexetis 
sonstrogmnt teers, yYisv s eesvig onole eoltsiat edt to seu etAT 
ecoaset two todsl tneeetg Ilsde ow baa ,yostwoos tkont of 
eYSi{idsifet trSds gninoiteexup rot 

tads erseqqs tk anoitsulsv' sasdt to. sost alt a0 
est ersey dnesser mk absoulist lo -shemeasees state ont 
-eesees bosktisups Isios edt e1sstam [smtol s tondisit ss0osd 
stste oot at ebsorlist sisete nsdi rsdto yiisqotq to sJnom 
ak BOS ,b%O,Ld0,¢1G oF SLOL mi SVL,b3G C08} mort meets ead 
etedt bolteq afds gnitub tud .SY.CL£ to sasetoni ns =, ISL 
odd o¢ bebbs atelLob moltilim s tisd tuods yino need asi 
nett esol to ,vtreqorq beoiliar os ‘to aofttsxsIsv besilsups 
etme0 t9q somo to tien-sro 

yd boyolqms snemeassas bsoilist to bortem sxAT 


nseod esd etssy tusoort ai motissifseups to bisod stste ont 


66. 


in part responsible for this situation. 

The obvious inference to be drawn from these 
figures, taking into account the fact that the aggregate 
valuation of all other property has increased by almost 
20% since 1912, while the total railroad assessment has 
been stationary, is that there has apparently been a trans- 
fer to property in general of a part of the tax load which 
should have been borne by railroad property. The ratio 
of total taxes borne by railroad property, as shown in 
Tavle V on page 28 above, also indicates a gradual dimin- 
ution of relative tax burden since 1914, 

This apparent shifting of taxes from the rail-~ 
roads to other property is neutralized in some degree at 
least by the differences between the actual basis of as- 
sessment for railroad and other property. This whole mat- 
ter is shrouded in mystery, so that in reality no one in 
the state has any adequate, accurate knowledge of the re- 
lative tax burden now being borne by the railroads and by 
other classes of property. The testimony from both sides 
is of such a partisan nature as to render it worthless in 
passing upon the merits of the issue, and the problem can 
never be satisfactorily solved until the oontrol of both 
the railroad and the other property assessments are put 


under the control of a competent, impartial state tax 


Area foitsutiea elds tot eld tanogest tt8q nt 

seedt mort aman oJ ot someteini esotvdo eat pany: 
stegetggs edt gant Jost ors Imuosos osnk gridst pec a 
steomls yo beasotont asi yiteqotg xedso Ils to noltsulev 
eat tnemeesaes hsoilist Istost ors ofidw .SLer gonte ROS 
-enstt & fed Yitnetsqqs esd erent tedt et ,ytanolisia nmsod 
coisw bsof xst ont to disq s to fersnsg ni ytteqoiq of ‘tot 
ottst eat eVWtegotq bsotlist yd Snto used even biyuode 
ai awode as .Ysisqota bsoilis1 yd emtod sexst Istos to 
mimib Iaubatg s astsotbat oats ,evods 8S egeq mo V efvaT 
: oAL€L sone mobiud xed ovitelert to aoiiv 

-[ist oft mott sexst to gnitiicda tnetsgqs ela I 

ts .99%395 smoe ni hestisxtwen ait yiteqotq szsdto ot absot 
-es to elesd Isutoe oft aeewisd seonetettib sdt yd gasel 
etsm elorw aint  .ysueqotq tsdte bas bsotlist tot tnemecee 
mi emo.omn ytifset at sadt oa ,yteteym af bebhvoide el rsd 
-st oft to sghsiwondt otstwoos ,stsupsbs vs acd eista oct 
yd bas ebsotlist ost Ac) entod guied Wont sebiud xst evisst 
eeble Atod mott ynontitess oAT eVitegotg to eseaslo recto 
ni easidtiow ti tebmet of es etutsa oxeiiteq s stowa to af 
nso meidotq st bne ,euaet ot to adizos ost fogwy griteaesg 
sitod to Lourneo oct Iittau bevloe Ylitotostatise sd t9vem 
tug ots atnemeesean ystogotg torto ot bas bsotlist oslt 


xst stste Isitisqmi ,tustsqmoo s te Lo1rtmoo oct tebny 


67. 


comnission. 

A comparison of the railroad assessments in 
greater detail reveals the further fact that the tax bur- 
den on these properties has not been equitably distributed 
among the different roads themselves. This is shown by 
the wide variation in the actual value per mile of main 
line for the different roads, as determined by the state 
board of equalization. We present below these actual 
values per mile for 1912, 1916, and 1921: 

TABLE XII. 
ACTUAL VALUATIONS PER MILE ON MAIN LINES OF RAILROADS. 


1912 1916 1921 
C.M.& SteP. 185 rah, 3,806 
Gt.Northern 96,159 88 , 266 88,4352 
N.P. 84,050 81,745 81,682 
0.W. 72,086 84,272 83,565 
Spokane,P.& S. 106,043 95,911 89,784 


In 1912 these actual values per mile ranged from 


$72,086 for the main line of the Oregon-Washington, to 
$106,043 for the Spokane, Portland and Seattle. During 


the intervening years to 1921 there has been a tendency 


toward a more equal valuation, but in 1921 these values ap- 


pear to be unnecessarily diverse. We do not mean to attach 


undue importance to this test, but it does appear tocus that 


for the principal railroads of the state, with substantially 


Pa 


eftoLeatmnoo 
ab atnomeasess SDsotlist oft To moelisgqmoo-A 
etsd xst odt tedt tost, rodsdivt..oedt elsevet L[iste5 trodsory 
botudiutathb yldstiups nesd con asd aeltusqoiq s2edt mo mob 
yd swonds at aldl ..aeviosemedt absot insistitb odd gaoss 
nism to slim toq suisv Ieutos oft at nottstisv ebiw oidt 
sista oft yd benimretes as ,absot gnsrettib. ods, rot earl 
_fsutos seodt wolod taseetq oW .aoitssifsups to bisod 
s{S@l bis ,dofel..Slel sot slim r9q eoulsv 
0! » LIX BISAT | 
. SCAOAIIAA TO AaMIT MIAM 0. EITM AGT eWOlLTAUIAV. JAUTOA 


Ser iy erer Ser 
‘ ee IT S8L,56. ~IeSE BMD 
SES , 88 88S ,88 ear ,de aredtrone td 
$83,f8 | Bao. £8 020,48 a 
eae ,.é8 S¥S 48 aso ,.sf ~W.0 
BBY ,@8 rre,ae E0,0f 2%. T,omadog? 


mort bepast ofim rsq eosulsvy Lautos, sasds.SLOL al. 
ot ,fotantdesW-anoge10 oft to omtl, nism, ait, rot 380,8%% 
siti, .oftised. bas basitrol. ,esasdog2. oft..rot, Sh0,50L¢ 
yonsbnst s.mesd,ssd otedt IS@l ot. arsey anineviretat, odd 
-gs aoutsy, seeds [Sel at tud. .aotisulsv Lsupe siom 5. biswos 
fosiis of nsom tom ob. eV setevibh.yiirsaesosnmy..ed of 189¢ 
tedteusot tseqgs, ss0b.ti. tad ,teos.etds.ot.s0nsttogmi subay 


yiistinetadye dtiw ,stste edd to sbhsortis: Isqtoningq oft t90T 


68. 


similar conditions of construction and operation, and 
with fairly equal terminal facilities in the leading cities 
of the state, that the actual values per mile should be 
reasonably closé together for the different roads. 

It has been urged in partial extenuation for 
the leniency displayed toward the railroads thet they 
have faced a steadily increasing competition in both pass- 
enger and freight business from the privately owned auto- 
mobiles and motor truck lines which operate over the high- 
WaySe 

This is a serious situation, if true. The amnaz- 
ing growth of the automobile industry, and the very rapid 
diffusion of this means of transportation among the peo- 
ple has undoubtedly meant heavy inroads into the local 
passenger business of the railways. In recent years the 
growth of motor bus transportation has cut still further 
into the railways' local passenger business. A sinilar 
development of motor truck transportation threatens the 
local freight business of the railroads. To the extent 
that these recent transportation developments have actually 
reduced the earnings of the steam railroads, and thus les- 
sened the value of their property, due account should be 
taken of them in determining the taxable value of these 


properties, But if the growth of motor vehicles and motor 


. 8d 


bas ,aoltsteqo Sns mottoursamoo to amotsibnoo ssttote 
eettio uatbsel ont nt aoitiftost fantares fsups yitist dtiw 
ed biluodea oLim tog asutsv Isutos st tact ,stste oft to 
-ebsor tnetotith ect tot “onltegot saofo yldsnoasct 

Toi moissunssxo istttsq at bonis mood asd FI 
yout tsdt absorlist ens Siewos beystgeih yoneinel ods 
~aasg dtod al motsicegmoo antasetoni yitbseta s boost avert 
-otue benwo ylodsvitg ods mort esaentaud Sdgtert hula abuse 
-dgin end tovo oteteqo doidw eenil Aourd tosom bas solidom 
: 2 ayow 

-Ssms sdT sound iL sotsentke auoiliee s et afldt 
hea etov oat bap ViIseuwhbat slid omotus ont to diwortg gat 
-o9q ot giome sotvsdiogansts to-ansom.atdt to molauttib 
fsoof odt ofat absoint yvsed taod YLbeddwobnl sé Stq 
eit atsoy tneost, al -eyswits:t sit To aasataud tognisvesg 
_tedtxunt Ifite tuo asd motistiogansit end totom to Atworts 
atsifnie A -2eontaud T9gteeesg fsool ‘ayswitss ons otat 
edt anstsoidt Noitsitoqenstt Aourt totom to émemqolevaebd 
tastxe ont oT -absotfisrx oft To aeonteud $egtoxt LsooL 
ytisutos even atnomgofoveh noliattoganats tne09% sacdt sant 
“aol audt bis ,absoilisr mseta ont to agniniss ont gases 
sd biyode tnyooos eub drs qord atond to eutev add beere 
eeodt to oulsy oldsxst odt gninimreteh af mont To nexst 
totom bas aslottievy totom to dtwotg oft Tf Jue eds Wokoue 


69. 


transportation has attained this significance in the state, 
it is clear that we have here a source of revenue that under 
existing tax laws is not receiving the attention that it 
should receive. We shall defer to a later section of the 
report the more complete discussion of the taxation of motor 
vehicles, but it is clear that the loss in taxes due to the 
failure of the railroad assessments to advance must be borne 
elsewhere. The methods used in the railroad assessment 
have been shown to be of questionable efficiency. To the 
degree, however, in which the above considerations have 
weight, it is also perfectly evident that this loss in 

tax revenue from the railroads should be counterbalanced 

by larger revenues from the agencies which have been re- 


sponsible for this decline. 


Dix Electric Railways; 


The, tax.law. relating.to electric railways is 
also anomalous, in that the. state assessment is confined to 
the operating property used for transportation purposes, 
while all properties used for light.and power purposes. are 
in the jurisdiction of the county assessors. This rule 
necessitates in some.cases a purely arbitrary division of 
the. property, and is a violation of the fundamental prin- 


ciple of the unit rule of assessment. 


.etate ont mt esonsoltingia eint bontstis wait noitadroqanetd 
sebnu tsat sumever to eotwor 3 ered ovat ow dsdt tsefo at tt 
tik tent aoliaostis oft gutvieos: ton af awel xst gnktatxe 

eit to mottesa toseL s ot t9teb iiede oW  yevlader Hiwore 
totom to moisaxst ot to motaeyoeth aselaubs stom odt trtoqet 
odd of sub eoxnd af esol ond tant nesfo et tt tud ,aeLotrev 
entod sd teum sonsvbs of adnemaasaas baotita oat To ersltst 
“fnemasoees bsorlts1 ot at boas abodtem on? ; . sterivea le 

edt oT “.yorteroktts eidanottasy to od ot nwode noed sved 
evel enoitsrsbtenoo svods sont dotdw at .tevewonl ,setgeb 

nt aaol aids tad¢ tnabtve yltostreq cals et #1 ,tdgtow 
beouslsdtoduvoo od Sluode ebsorlis: ont mort eymevet xet 

-97 aad aad dotdw agionogs oid mort aeunsvet togisl yd 


eontfoob akatd tot sidianoge 


seyswitsd ofstoslf  .¢° 
el eysewiist okutoefe ot gnitslet wel xs} ed?’ 


ot bentimoo at tromeaasaas odste odd tans wt \avolsmons oels 
,Bes0giug noitstitogensit tot beam yrueqorq unitsrsqo ‘ons 
StS eB9Bogingq iswoq bus tdrall, trot bean vestixeqorg ffs oeltiw 
efit Bint -atoessaas yinwoo oft to mottotbeltrs, ons mi 

to, mofeivib yisitidrs ylem, 8 a9eno omos at aststiaaeoen 
etitg Isinousbayt eft to nottsfotv.s ef bas ,ytroqorg! edt 


.tnomaesaes to slur tin edd to efgto 


70. 


The peak veluations, both actual and equalized, 
of the electric railways, were reached in 1914, The great 
drop in these figures in 1921 was due to the acquisition 
of the properties of the Puget Sound Traction, Light & Power 
Company and the Western Washington Power Company by the city 
of Seattle, and the consequent withdrawal of these proper- 
ties from the tax rolls, We have no desire at this point 
to enter into a discussion of the subjcet of municipal 
ownership of public utilities, or of the general policy of 
the extension of the commercial activities of our cities, 
but we cannot refrain from reference to the significance 
of this policy from the standpoint of the tax rolls and the 
tax rate. For example, the acquisition by the city of 
Seattle of the street railwey properties above referred to 
has meant the withdrawal of $7,675,000 from the local tax 
duplicate. The taxes formerly paid on this valuation have 
been shifted to the other property, including real estate. 


The very least that can be urged upon these communities which 
desire to embark upon such experiments, is that these com- 
mercial undertakings be operated along such lines and in 
accordance with such principles of policy as to make them 
self-sustaining and not a burden to the remainder of the 
property of the community by the levy of taxes to cover deficits. 


Ah 


besiisups bis Isutos dtod ,anoltsuyt{svy Aseq sat 
gseo13 oT bL0L at befloset stow ,eyswiist apetweke itt To 
nottiatypos odt ot ob asw [SCL ak setugtt eacds mk gots 
towol 3 trigid ,mottosi? Buvoe segud edt to astizogorg add to 
ytto od¢ yd yusaqsod tewol motgninesW ceesheW act bas yasqmuod 
-1sqotq saendt to Lewstbdd tw tnenpsenoo oft bas ,elttssa to 
¢ntog alit ts estiesb om overt oW 8 .alfor xed odd mort acts 
“Laqto tau to feotduya ot To aadegnoets 8 otat totne of 
to yotlog Isteneg sft to to ,asitkitty olffduq to qiderenwo 
,eettio two to aelistivisos Istoteumoo eft to motanetxe ont 
sonsottingte odd ot sonstetezt mort nisitet tonnmso ow sud 
efit bas affor xst edt to tatogqbasta ont mort yotlod ‘abst to 
} to ytio edt yd mottiatupos ont ,elqmsxo tot otst xat 
ot hertstes evods setstisqotq yswlist ftoortte ont To sltised 
xe¢ £Isool sot mort 000,c73,%8 to [swetbdtiw ods tnsem asd 
evaed gotisulsv aids no bisq vitomrolt.asxsts oft -stsotiqud 
otstes [set gutbulonk ,ytteqorq reddo odd ot bottide mood 


dotdw seitinumioo seeds mnogu beni od neo Ssdt sesol Yiov ont 


-0o geet tadt at ,atnemttooxe Hove smog waoadmo ot etteeb 
at bas eontl dove snofs betsreqo sd agntisitebay Istorom 
ment exsm ot as yotlog to welgqtonitg done Adtitw sonsbt090s 


ot to tobaitsmes sdt ot nebaud s tom bas goinisteye-tise 


eattottebh ssvoo of aexat to yvel sat yd ydinumnoo ont To yrxeqozg 


71. 


6. Telegraph Companies: 
The amount of telegraph company property in 


the state is relatively negligible, as is shown by the 
figures above. It would appear to be unwise to continue 

the taxation of the telegraph companies on an ad valorem 
basis, and it is certainly unwise to continue the policy 

of distributing the valuation to the various local districts. 
The taxes paid by the telegraph companies are thus frittered 
away. They really should be concentrated into some state 
fund where they will really count, and in view of the re- 
letively small amount of property involved, it would probably 
be wise to substitute an earnings tax for the property 

tax, as has already been done in the case of the express 


and car companies. 


via Private Corporations: 


The private corporation is taxed on its real 
end personal property as assessed by the county assessor, 
in the same manner as are individual property owners. 

The only point at which the corporation is treated dif- 
ferently, is in the fees charged for incorporation and the 
license taxes levied for the privilege of doing business 


in the state. 


« £f 


2g9f te) 2 i: ) 
ai ytroqotq yasqmoo dqsigefes to Snuoms oat 

edt yd mvotlae et es ,sidigtigen yfevitsies al sista ent 
eunttnos ot satwas ed of tseqqs bi{yow It1 .evods ests lt 
merolsvy ba as ao aeinsemoo dqatgetet od? to mnottaxsd, odt 
yotlog edt eunitnoo o¢ satwnu yinisttoo et tt bus ,atesd 
watotuteks Lso0L avolusv eds of motisuisvy oft gattudiztgaib to 
betetiint exat ota eetuscmoo dasrasfet eds yd biaq sexst ont 
etsta emoe otnt betsrtmoonoo od bivofa yLl[sor yet  .\yswe 
~9% ont to wetv at bus ,tavoo ylisor L[iiw yedt, exedu bavt 
yidedorg biuow ti ,boviovai ysuogotq to ¢nyoms Ifsue ylovisel 
ystregotq ort tot xet aantates as etusitadua of sakw sd 
ageigxe oft to sano oft mi onoh need ybsotls aad as ,xst 


. ,aeinsgmoo 189, Sas 


senoitstoqto2 etsvizg =. 
Iset ati mo boxet ak motietogroo stavitq eT 
.to229ea6 ytayoo edt yd panesees as Ytrsqota Isnoateq bas 
eatenwo yiteqotq Leubivinar 918 8s Tontsam smse sdt at 
}@tib botse1tt ef moktstoqioo ext dotdw ts tatog yiItto SAT 
edd bua nottstogroont tot beatsedo asst ont at eft vLtnetet 
2zaentaud yntoh to esgelivitq sxt tot beitvel asexst sansorl 


orate oft mi 


72. 


In most cases this parity of treatment in taxa- 
tion is wise and sound. Many of the incorporated con- 
cerns in this state possess only a small capital, and 
they meet the competition of individuals and partnerships 
in most lines of business activity. The license tax is 
not a discrimination against the corporation but only a 
very moderate charge for the privilege of limited liability 
and other advantages which accrue in conducting a business 
under the corporate form. 

There is a limited number of concerns, however, 
for which the property tax as it is understood in Washington, 
is hardly an adequate system of taxation. We refer to 
those corporations which, by reason of their possession 
of valuable natural resources, or of superior advantages 
in production based on location, patents, etc., are earn- 
ing a return in excess of the normal return on capital 
under competitive conditions, The tangible assets of 
such concerns, including their real estate, plant and in- 
ventory, are a very inadequate basis for their taxation. 
There is a surplus of ability to pay taxes here which is 
not reflected in the assessed valuation of the physical 
property, and the policy of exempting their stocks and 


bonds to the owners merely emphasizes this disparity. 


-sxat ai tnomtssis to yttisq altdt eeaso teom al 
emo09 bstatogroont ost to coal .bosoe bas satw et mott 
bas efetiqss Lfsne 8 + ia aaseeog stste aids ak antes 
eqisatontisg bas alsubtvibat to nottitequos edt toom yoodt 
ei xst genootl oAT eCtivisos aeentaud to aonks deost at 
& YWlmo tud nottstogqtoo odd sanisas notisnimitoarld s ton 
Ysilidetl bet¢imt£ to egeltviiq edt rot egtsdo ete1obom rev 
esontasd s anivoubmos al sutoos do teiw eogetasvbs todto bas 
| et OT etstogroo eat tobnas 

,<t9vewod ,antesonoo to tedmun Sotintl s et erent 
aocanidesW ak bootetebuy ef ti as xas ystogotq ot dotdw rot 
ot tetet oW eMolssxst to meteye éinmpee te yibisd af 
cotsuanees thodt to moasst yd ,dotidw enoisstogtoo saont 
aszgzsinsvbs toltequa to to ,ssotvoeet Istuisn ef[dsulsvy to 
“1189 9IS ,.0c9 ,atnotsq ,mottsool mo bsasd mottouborq at 
{stiqso mo atutet I[smtom sdt to aseome ni mivtst s ant 
to etseas sidtignss onT snolsrdonos svititegmoo tobnay 
-tf bus sasiq ,eststas Ise1 rtedt gathufont ,amteonoo dove 
eftotitasxst tisdt tot atasd otsupsbant yiev s sts ,yrostasy 
al doftdw sted aexsd ysq ot Yiilids To aylquva s eat oredt 
fsotaydq edt to motitsulsy beaasaes ot at batooltexr ton 
bas exoote tiedd gnaisqmexs To yotlog edt bas ,. ysrtaqet¢q 


eUiiitsqatb aidt aexstasdqme ylortem atemwo sat of abaod 


73. 


We are offering no recomuendation on this point since we 
have not attempted to ascertein the extent to which such 
a situation normally exists among the corporations of the 
state. In the preparation of a model program of state 
taxation, this possible source of revenue should not be 
overlooked. It can readily be reached by extending the 
annual franchise tax to cover the corporate excess when 
this exists, or by means of a business tax on corporate 
net income. Use of this probably would be conditioned 


upon an amendment to the constitution. 


8. Banks: 


The taxation of banks by any state is subject 
to certain limitations which have been imposed by the fed- 
eral government upon the taxation of national banks. 
No state may tax national banks except in accordance with 
the general conditions laid down by Congress, end no 
state will discriminate against its own banks by subjecting 
them to higher taxes than are imposed on the national 
banks, 

The Washington method of bank taxation is to as- 
sess ell-bank shares at their full and fair value in money, 


and to list their stock for taxation at 50% of this valuation, 


Sw 90mfe Infog aidt no nottebasumooet on gntzstto 9ts oW 
dove dotsw ot t¢astxo odd aksttooas of betqmotis ton evsda 
edt to anotiatoqiroo oft grooms etaixe YLismron mnotisutia s 
Sstsie to metgo1q Lobom s to motisteqetq odd al eotstea 
8d ton bfluode gumovet to gouvoe eldtesoq aint Moitsxss 
edt gatbnotxe wd hetloser od ylitbset aso 3I .bextooltevo 
nentw aasoxe sder0gtoo edt tevoo ot xat satdonstt Isunns 
‘efstogtoo mo xsi aaemtaud s to eansom yd to ,ataixo eid 
benotttbaoo ed Slyow yldsdorq eidt to oaU ' ,emoont ton 


efoitutistanoo oft of gnemdbnasms as noqu 


:ahosd 86.8 

tootdue ai etsta yas yd adasd to motisxst odT 
-bst odd yd beaogmt aeed evsd dotdw anoitstimi£ atstreo. ot, 
eainsd Isnoitsa to maotisxss. sedi mnogu tasmmievog iste: 
dtiw sonmsbtoccs ak sqsoxs aiansd {snoitsn xed ysm etste off 
on dbus ,239tgm00 yd mwob bist enofliibnoo L[stoney ont 
anttostdue yd ednsd swo ett senisgs otsaimfitoatd Lliw. sista, 
isnolisn odt no beesoqmit ors usdi asxet isdgid oF. modi 
-exiasd 

-as ot ei mottsxst uaasd to bodtem aotgnidesW oAT 
vonom ak euisy tist bons Ifut uledt tsa astsde xnsd- iis aegee 


mottsulsy atdt to ROG ts moitsxst tot doote rledé ¢atl.ot bus 


74. 


first deducting therefrom the assessed value of the real 
estate belonging to the bank. THe peo blice for years 
hes been to take the book value of the bank's shares as 
the "full and fair value" of these shares. This is a 
valuation which can be actually determined from the bank 
statements, so that if this rule is consistently and gen- 
erally followed bank stocks are the best-assessed class 
of property in the state. 

The problem of bank taxation in its relation to 
the treatment of other classes of intangibles, such as 
stocks and bonds, mortgages and credits, has been given 
a turn by recent federal Supreme Court decisions of which 
the governor and the legislature should be made aware. 

The states have proceeded on the assumption that they were 
complying with the federal statute (U.S. Rev. St., Sec. 5219) 
if they provided for the taxation of national and state 
banks and loan and trust companies on the same basis. 

But in June, 1921, the United States Supreme Court held 

that in providing for a low flat tax on intangibles in the 
hands of individuals, the State of Virginia was actually 
discriminating against national bank stock in favor of this 
“other moneyed capital" in the hands of individuals. 


ST 


Iset edd to exisv beacoaag srt motteteds galioubed sattt 
- arsey tot dottoaag watt ~wnsd ‘edt of antanofed ststas 
as setede a'xinsd eft to euisv Aood sdt sist of need ash 
8 ef aldt eestsie sesdt to “evisv tist bas [Lut" odd 
xaned ont mort pentmreteh yifsuros od aso dotnw notisulsav 
-f9y Ons yLtnetatamoo ef ofur eid? Ii tedt oa ,atnenoststa 
gasio boseseas-tasd ott ors axtootea Ansd bewolfot yifsts 
Stste ods mi ytreqotq to 

ot motésfot ati at mottsxet wAnsd to maidorq oT 
as dove ,aoldignsint to essaeslo todto to tnomtecotd ont 
aovig aeed ast ,atibeto bus asgsyi tom 6abaod bas exoote 
dotdw to anofatoah fryod ye eee {stobst Pei ud must 8 
-OTsws ebsm ed biuoda exutsLatgel ent bas TONISVOU ons 
et9W wads tsdt sofiqmwees sit mo bebessorg oval asiste oat 
(@f8s .902 et -VOH .2,.U) otutste Letohet ot dtiw anityflamoo 
stste bus Isnoitsn to moftsxst odt tot bobivorg yerns tL 
eetasd onsa ond £0 eekincne tauzs bas nol bas ainad 
bisi tuvovu smexqua aetsse bos tau ent £82. yaa pe tue 
ent nt asidizasinar no xst talt wol s tot pothivord at sects 
vifsutos esw sinigtiV to stiste edt ,aisubivibat ts “het 
efdt to tovst at Xoote unsd Isnotter teaisgs gottsaimizoarhb 


-afsubtvibat to abusd odd aft “Istiqso Seysnom zosito" 


75. 


(Merchants National Bank vs. City of Richmond). This 
decision endangers the classified property taxes in a 
number of states, and in New York, where intangibles have 
been exempted since the enactment of the personal income 
tex law of 1919, the national banks have brought suit for 
the recovery of some $12,000,000 of taxes paid on bank stocks 
in the last two years. 

Thus far, of course, nothing hes happened in 
Washington to.disturb the established situation, and an 
amendment is pending before. the Congressional Committee 
on Banking and Currency to correct the effects of the 
Richmond decision, In the meantime, it is quite possible 
that this decision. would afford a basis for a contention on 
the part of the national banks of this state that the com- 
plete exemption by this state of all intangibles in the 
hands of individuals was an unwarranted discrimination 
against their stocks. The situation contains sufficient- 
ly serious possibilities to warrant our recommendation to 
the governor and the legislature that steps. be taken to 
urge upon the state's members of both houses of Congress 
that favorable action be taken upon the proposed amendment 


to Section 5219 of the Federal Statutes. 


atfT  .(bnomiotf to yttO .av Aned Isnotss etnssdoreM) 
& ai asxst ytiteqotg betitaesio sai stegnsbhbns noiatoob 
evs eeldisasini stedw ,xxoY weli nt bus ,astste to todmua 
emoont L[saoetsg sit io tnemfosms edt sonia botqmexs ased 
tot ¢iwe ¢dgyoxrd sve ainsd Ismottsa odt ,@L@L to wal ast 
eXoota uansd mo bisg eexst to 000,000,SI% omoa to yrsvocer sft 
-sts9y ows gesf ons at 

ni bensqqsd” asd gnisiton ,setyoo to ,.tst aunt 
nse bus ,moitseutke borletidstes oft dtuteltb oS xotautteat 
eettinmod fanofeastgi0d odt etetsd gnibaeg ef tnembnoms 
eas to atosttes sdt tosrr0oo oF yometTiIVD bas gntsinsd so 
elidteeog ottup at St ,omtinasom oft al eMtofetosh Serontto £1 
fo moitastnmoos s tot afasd s hrotts Sivow mokatosh aids teult 
-m09 edd dsdd stete aids to edasd Ismotisn oft to t1sq ari 
edt ni esldtagnsini [fs to otstea elds yd nofttqmexe ‘sate 
mofisnimtioets betasiisway as asw elevbivibat ¥o Abgad 
esastoitive anitsiaoo motisutta sxAT eetoote tiods tentags 
ot molisdbnemmooet iwo tnettsw ot eottilidieeog avotzee yi 
ot asaiss od agots tsds otusslaigel sat ban debrer os ont 
esetgn00 to aseuot diod to arsdmcm Portada ods mnogu spin 
sasmbaems Sezogotg edt moqu aewsd ed mottos sidstovst tant 
-aetutsia IstebeT edt to else noitoe2 of 


76. 


DEFECTS OF THE WASHINGTON 


SYSTEM OF TAX ADMINISTRATION: 

We heave dwelt at length upon the structure end 
operation of the Washington tax system because we believe 
that this system has developed certain very serious defects 


which must be corrected if the tax burden is to be equally 


distributed. These defects are chiefly administrative 
in charecter, that is, they are defects in the operation 


and administration of the tax laws rather than in these 
laws themselves. 


The first end most serious defect which we would 
emphasize is the lack of adequate central control over the 
assessment and equalization of property. This state was 
one of the pioneers in the introduction of centralized tax 
administration, since its state tax commission of 1906 an- 
tedated the similar commissions in Minnesota, Kansas, Ohio, 
Oregon, California and various other states, Unfortunate- 
ly, this commission was not given at the outset sufficiently 
comprehensive powers of control and supervision over the 
assessment end equalization of property; and still more 
unfortunately, the excellent beginning in modern tax admin- 
istration which was made in the creation of the state tax 
commission was undone when the law creating this body was 


repealed in 1917. The office of state tax commissioner 


oT 


bas stutoutte edt noqu dtgnel ts tlowb even SV 
svetied sw osusood meteye xst notuntsdesW oft To notisteqo 
asosteb avottse yviev akedteo beqofsvebh east mefeyea akdat tsdt 
. ‘ifsups od ot af mobtud xsi sAt TE Hetosrros od sSaum dotnw 


svitsitetnimbs yitsido ots stosteb saont ebstudintarb 
noltitsteqo edt at etootsh s1s yout ,at isdt ,tetosredo mt 
seeds at nsdt tositsr aswel xst odt to mottsittatnimbs bas 


~2ovisemoedt ewal 


bilyow ow dotdw tostess avotios staom bas terfrt sdT 
oft tevo Lorsnoo Isitaso stsupebs to wxost edd ef ostessiqms 
esw etste ata e“srsgoty to molissiisups bas tnsmeesaas 
xst bestisiiness to moftoubortnt sdt at arosnolc sit to sno 
-%8 O0@L to motaatumoo xed state ott somte ,nottettatnimbs 
,ofdO ,asanesi ,.stoasnniMl mi anoteeimmoo telimte oct betsbot 
-stsnuttotau -a9sst2e tonto asofisvy bas Sintotiisd ,aogst0 
yilinetoftive tsatuo sdt ts mevig ton asw noteatmmos atad UL 
edt tevo molatvisque bas Lorsinos to etswog svienesdetaimoo 
stom Ifftte bas ;ysteqotq to mottsat(supes bas Insmaesaas 
-aimbs xat misbom at gninatged dmeifesxs edd Yiotsaus totais 
xsd sista sdt to motiass1o edt ai obsm asw doftw soitstiat 
asw vbod atdt aguttseto wsl od} aonw Ssnobny asw aol2ainmoo 


tenofeatmmoo xsi siste to soitto ext -TL@l at belssqor 


77. 


was created at this time and presumably this official was 
given the supervisory powers formerly exercised by the tax 
commission, but the appropriation was materially reduced, 
and the loss in prestige which came with the change effect- 
ively negatived any real influence which the tax commission 
had built up. The same supervisory powers are now vested 
in the director of taxation and examination, but this of- 
ficial has even less real authority in tax administration 
than his predecessors enjoyed. 

As a matter of fact, the task of thorough, effi- 
cient and effective administration of the tax system in 
the State of Washington, with its immense area and varied 


interests, is too large to be handled by a single commis- 


sioner, and our central recommendation looking toward the 
reform of the present chaotic condition of assessments is 
the establishment of a tax commission of three members, 

to be appointed by the governor for terms of not less than 
six years and at salaries sufficiently large to attract 

hi rade men to this office. The principal basis of 
these appointments should be fitness, as evidenced by the 
knowledge of taxation and administrative capacity of the 
appointees. 


ot 


asw Istottto eidd yldsmveotg bas smit eidd ss botssto 2asw 
xet oft yd heatorexs yltsmiot atewog ytoelv1eque ods novis 
~o9oubet yilstiietsm asw notisiiqotqqs oft tud ,nolaainmos 
-soestts ognsdo eat diiw emso dotdw eagtisactq at eaol ods bon 
noteetmuoo xs¢, sdt dotdw soneyLint Isst yns bevistssen ylovt 
hesaev wom ots atswog ytoaivteque ons 2 eiT equ titud bs 
-to sind gud ,mottsaimaxs bas soitsexes to tosoetih edt at 
maotisitteinimds ead mi yvtitodius Iss1t esef asve asd fsioit 
eboyotme atoesaesosborq ain nsat 

-Lits ,dgvotodt to Aaast oct .tost to wsttsm s eA 
mi movaye xet odt to mottsrtteinimbs ovitostts bas tneto 
betisv dns sots senommt atl dtiw modgatdesw to oftssta ont 
~atumoo elgnia s yd bolbasd od ot sgisl oot at ,ataetoint 
eds biswos gntvool mottshuemooet [stdéns20 tuo bas ,t9snota 
ei asnomeaseas to moitihnos oistosdo tnoastg ont to mrotst 
6et9dmem sertns To motaetmmoo xst_e to jnemaat([dstas ods 
asit east ton to antes tot sonitevos odd vd besnioggs ed od, 
tositis ot sytel yismstoitive setisisa ts bas ateey xta 
to siesd Isgtontig off  .90ttto aints ot nem sbsia said 
ost yo beomebive as ,seontkt od blworle esmontatoggs sods 
edt to yitosgso ovissitetnimbs bas motisxst to ssbolwonxt 


-ssotnioggs 


78. 


Such a commission should be given complete super- 
visory control over the whole tax system. By this we mean 
that it should have the power to compel 2 proper local as- 
sessment and equalization of property for taxation, and 
to this end it should be empowered, when necessary, to order 
@ reassessment of any or all classes of property in any 
taxing district, either by the regularly constituted taxing 
officials or by special assessors chosen for the purpose. 
With these drastic powers of control should go the usual 
supervisory powers which are now vested in the tax commis- 
sion of such states as Wisconsin and Minnesota. In ad- 
dition, this commission should be given the full powers 
of equalization and of corporate assessment now exercised 
by the state equalization committee. The present ex officio 
board should be abolished. 

Our subsequent criticismsof the operation of 
the Washington tax system flow from this central defect 
in the administrative organization and procedure. 

First, we have found that there is no adequate 
meens of checking and testing the assessment of property. 
The state board of equalization has for years prepared a 


table of ratios of assessed to true value, but the methods 


8 


-toque etefqmoo mevig sd biuode moleatimmod 8s dowe 
apem ow aint Ya .msteve xet ofodw edt t9ev0 Lottmos qroaly 
eas {so0f zsqotq s Legqsioo of téwogq st sved biuosda tt todd 
bas \nottaxst tot ysrtegotg to nottsst [supe bas tnomeaoe 
t9bhbto of .yIseasoen nonw ,bsrswoqms ed Bilyode tt buns aid? bf 
Ys mt yiteqetq to asaasio Ifs to yas to snemeesaasct s 
goixss botustienoo ylusfusex oot yd asdtis wsotrtet gnixes 
-sa0qtuq edt tot mesons etoaaszes Istooga yd 10 alstottto 
Isuay ont og biwyorle Lortmos to atewog SESBEEB Gadde dt iw 
-eimioo xst oft at betaev won sts dotdw atewog Ytoaivreque 
-hbs nl .stosedncil Sas afenooalW as estate move to mote 
atowog [fut edt mevis od biuode moleeimmoon afidt ord Eb 
Heeforoxe won jnomaasaes ststoqtoo to bas toitesifsyps To 
ofoltto xs t¢useetq ont .99tt iem109 sottsstlaups otede ‘od us 
sbodatiods sd biyore prsod 
to notisteqo edd toaatottito ¢neupsadse WO 
sootod Lertaao aindd mort wolt moteye xsi notantdesy ont 
,otubsooty bas fottsstiasgto ovitesrtetntimbs ants nt 
sisupebs om at siedt Sst Hnyot eved ow etarle one 
-Ytusgortg to tnomecoeas sit gnfttest dns gntvosro To ensom 
s botaqgetq etsey tot est mottssifisups to brsod state ent 


ebordtom oft tud ,extsv eit ot bosesees to eottst ‘to ofdst 


79. 


employed in the construction of these equalizing ratios 
leave the most serious doubts as to their accuracy. In 
1910 the tax commission described its system of compiling 
these ratios as follows; 


"The Tax Commission first caused a 
list of transfers to be made in each county, 
describing the property conveyed therein 
during the preceding twelve months, giving 
the names of grantor and grantee and show- 
ing the consideration. These lists formed 
the basis for the interrogation of witnesses 
examined concerning the value of property. 
Sessions of the Board were held in each 
county, and all told eight hundred and 
cighty-five witnesses were cxamined under 
oath as to the actual price paid for prop- 
erty changing hands during the preceding 
twelve months. Stenographic records 
were made of this testimony, from which 
lists describing the property concerning 
which testimony was taken were made and 
forwerded to the county auditors, who were 
required to certify the assessed value of 
each description as equalized by county 
boards. Upon the return of these lists 
the actual values as shown by sworn testi- 
mony were extended on them and the ratio 
of assessed to actual values was computed." 


(1910 Report, pp. 10-11) 

This plan of collecting the material on which 
to base a ratio for each county was defective for several 
reasons: 

First,- the number of transactions covered and 


of persons interviewed was too small. Only 885 persons 


s@f 


eoltst aatsifsups seodt to mofttouttemoo ont mi beyolame 
at eyosiyoos itlodt ot es atdyoh auotiee saom edt evsel 
gatiiqmoo to metaya ati beditoesbh moiaatmmoo xsi ond OLPL 
:awollot as aoits1 saenit 


s beavso tarfi molLaaimmodD xsT siT® 

*Usnwoo dose’ at sbsm sd) ot atetansit to tell 
naistedt beyevaoos yiteqotq ont gnidtioeshb 
gniviy ,adtnom eviews gnibesestq, edt satiub 
-wode has eetnstg bas tojnsig Io asmsa odt 
bemtot ateli ezorT Notistesbilamos edt: ant 
asaesntiw to moitsgortetat edd tot atasd ods 
e“strteqotg to sufsv ont gntmieom0o bentusxe 
doss nt bien stow brsof sdt to anolascad 

bos botbrud tdais blot [is bas ,ytasoo 
tebov benimsxs stew aseaeniiw evit-yidgato 
-qotq tot bisq sotirq Isutos ods oF as Atso 
gnibscsergq sat gnitwh abasd gatzunasdo ys1s 
abtooor ofdgstaonesa sentaom oviows 
dofdw mort ,ymomitest aidy to sbem si9w 
amtinresonoo ytisqotq sdt anidizroash eteil. 
bas 9hsm stow mexist esw Yromitass doldw 
‘etow ows, arodibys ytinwod ods ot hebiswiot 
to eulsv beaesces ont yYtitiseo ot betlupet 
<wudtaxoo yd Bosilsups as moktqtioesb doses 
atgetl seodt to mtutet ot nog .8bisod 
-ittest mtowe yd awode as asutsv Isutos orld . 
oftst oot bus med? mo bebastxe stew yaom 

" Hosuqmoo esw agutsv Isudos ot beacoass to 


(£L-0L .qq’ ,duogesd OLeL) 
dotdw co Istretsm odd anttos{floo to asiq: atdATt 
fstevse tot svitostsb eew yinivoo doss tot offset s saesd of 
;amoaset 
bas beteveo enottosansrt to zwedunnm ont -,terit 


enosteg ¢88 yfn0 Lfsme oot asw boweivistni enoatogq. to 


80. 


in the whole state were questioned in 1910 and an examin- 
ation of the stenographic reports of these hearings showed 
that some of these witnesses had no definite evidence of 
actual transactions in real estate. Second,=- there has 
been a tendency toward a professional witness list. The 
same persons appeared year after year. Finally, there 

was inadequate precaution against the inclusion of improper 
evidence. (See Lutz, "The State Tax Commission", pp. 
356-357) 

The preparation of the ratios has been given 
even less attention in recent years. The director of 
taxation is supposed to require of various officials the 
compilation of data on the basis of which accurate ratios 
can be compiled. It would be impossible to secure thor- 
oughly reliable ratios by such means, even with due dili- 
gence on the part of these officials, unless there were 
provided the necessary equipment and technical staff for 
the purpose. In Wisconsin, where the technique of the 
preparation of equalization ratios has reached its highest 
stage, a special statistical staff is employed in the field 
and office work the year round, and every transaction that 
enters into Cae: toneniadian is scrutenized and checked 


with the greatest care as precaution against error. Such 


208 


enimsxe 16 bue OL0L mi bonotteeyp stew osata sLlonw ent int 
bowoce agniused seedt to etroger ofdqetgonese od to notte 
to sonsbive etintied om bad agacontiw seeds to omoe sant 
asd etendt -,bn008a e9istes Isen nt anotvosensts: [sutos 
edt tell esontiw Ismoteastorg s baswot yorsbnet s nsod 
stent ,ylisnlt 789yY tetts i189y perseags aoe tag SiNBS 
segoiqmi to motaulont ext teatsgs notdusoote etsupobent asw 
-G¢ ,"Motaatamod xsT otade oft" ,sdud eee). .sonebive 
-- (88S-088 

mevis aesd asd eoltist odd to noliateqetq ont. | 
So xedca nba seus .aTsoy dnodeuimkagituecka W408 neve 
edt aefstoltto asoinsav to asiepes of heetecns af notstexst 
aotsst stsivoos dofdw to efLasd odd no stsh to noitaeliqnos 
-todt styose ot aielenames od -biivow ) ai -befigqmos sd mso 
eifib oub dtiw mevo ,eansom dove yd eottat eldatier yLsgso 
etew stods sasiny ,aisioltito seed to dang Mo 90mS3 
tot titste Isotndoes bas tnongtyos yisaasoen ont bebivotgd 
edt to supinidoet ond otedw "eleaocell mI ,.seoqiuq ssit 
tgaemgid ati bedoss:t esd aotist moitsstisups to hotisisqsig 
blott ost mt beyotqme ak Tiste Isottatiata teleeus 8 agate 
tsait moitosansit yroeve bas ,bnyor tsa9y ods Atow soitto bas 
hexoedo bas besinosyioa at notteluoise eet" tities atotne 


dove eTotts tsenisgs motiusostq as stso sastssry exit sitiw 


81. 


a staff costs Wisconsin a few thousand dollars annually, 
but it accomplishes a very equitable distribution of the burden 
of state taxes, and the evidemce thus collected is of the 
greatest service in the supervision which the Wisconsin 
commission,exercises over the local assessors. 

The problem of the equalizing ratios is serious 
in this state, for several reasons. In the first place 
the tax law says explicitly that property shall be assessed 
at 50% of its true value, It is not possible that ell 
of the assessors should attain this level year efter year, 
but it is of the utmost importance that they be advised 
and compelled to strive earnestly toward this end. The 
evidence concerning property values which a well equipped 
statistical staff would collect under the direction of an 
intelligent and active tax commission, would be of great 
value to local assessors in making the original assessment, 
and would be .a strong factor in securing an original eassess- 
ment of all property at the legal basis. Ignorance of 
relative values and of changing values in different sections 
in a city or county is one important reason for inequitable 
assessments. When we undertake to correct such assessments 
by means of a worthless ratio, it is the blind leading» the 


blind into the ditch. 


£8 


eYilsunns etsi[fobh bnsavont wot 2 } sbenooa tw ataoo Tete 3s 
nebtsd eit to motsudizrteib sfdsitups ee 8 ‘aedetiquooos tt tisd 
eft to af betoslioo emit oomebtve out ons .2oxst etate to 
atenooerW edt dotdw notetrieque fps at sotvree Seodnora 
-atocaszes Lsool oxi 19v0 asetortexs sozea timo 

avoitea at aotist gatsiisups galt ‘to me fd org ei? 
goslq tattt ont al <2oasot faseves Zot tad aad at 
beeseass ed {side ysdteqoig tacts Elttollqxe ayee wal xed ont 
{Is tsdt ef[dtseog tom ef SI sulsy ages edt To ¢ oe ts 
,t89y totts asey Level eids aistts biuoile atoeaseas ould to 
beeivbs od yeds tant eons trout teomty edt to al tt tud 
ont eDbae aidt Siswot yIseenise evinttea ot heLLlequos bas 
beqqinps [few s dotdw seulsy wdteqorg  ahamnoeroted sonebive 
ms to mottoerfh st zebmy toolloo biuow Viste fsoivaitate 
tss13 to od patton Molaaimioo xst evitos han tnogtifetnt 
,oomeesees Isanigizno sds gotisn at atoeeoees LsooL ot oul sv 
-229aes {snigito as B. sestyee sgn eas totost gnozse 8 od biwow bis 
to sonetonal - .etasd {sgel odd ts ytreqoig ‘ILs to inom 
anoftose gnsisttib ai asuisv gnignsio ‘to bas acre evitaler 
sidstiupsnt tot noaset sgnusttoqmt ono ak Caney ro wtto s at 
esnemeaseas dove tostroo ot sAxsttobay ow ody ‘Gue'nemns ones 
edgy gaitbselt batid edt ai ti ,ottst aseldtzow 8 to sammeae 


Mottbh oft otmi Srild 


82. 


The attitude appears to be general, both among 
officials and taxpayers, that the ratio is the important 
thing, and that equalization by this ratio condones any 
laxity regarding the legal basis of the assessment. Such 
an attitude is very demoralizing to efficiency in assess- 
ments. The attention of taxing officials and citizens 
should be constantly focussed on the legal basis of valu- 
ations, and in order to accomplish this there must be 
greater attention given to the actual 100% value, for it 
is a truism that 50% of true value cannot be determined 
for assessment purposes until the true 100% value has been 
‘determined. The assessor should be required actually to 
ascertain and to set down on the assessment rolls the full 
100% valuation of all property. The calculation of the 
50% basis then becomes a simple clerical matter, but its 
simplicity should not be allowed to obscure its importance, 

Secondly, the accuracy of the equalizing ratios 
is of serious import because of their use in determining 
the basis upon which the state direct taxes are levied. 
This direct state levy is now so large as to involve the 
possibility of serious inequalities of tax burden among 


counties unless the basis of apportionment is ascertained 


gnome “dtod* \Lervensg 8d od eteoqqs Shutlisis eft 
tnestoqmt off et older eft tart ,axeysquas bra efsloitito 
ene nenobnes okder wis YM moLtskilexpe sade how ygaiae 


dou@-  tnemeesees ont te elasd Iegol oft gntbtager ytixsl 


-aeseas ai yorestotits ot gnisifatomeh yisv ab ebutisis ae 


eestsito bas elesiotito gnixst 10 motinests°esT .atnem 
-§lev to efasd Isyel ost mo Hbeeavoot ylinestenoo sd hivofia 
6d seum stedt etodt detiqmoses ot rehro at Brie (anottes 
si-tot ,eulav ROOL LIawtos oft ot movty nottnstis r6ts07R 
bontoretsb ed tormeo sulsv eutt to ROG sadd metars s et 


noed@esnt eulsv BOOL swit ont LIlinu eseoqtug tnemeaseas tot 


ot YLlautos bhottupet od blyore toeesaes oT © Hbomimrosss 


[fot ot efLlor ¢ndmeseeaes ont RO awob ssa ot buna nist1908ee 
edd to noltelwolss saT  .ysreqore ILS to motssulsv 00L 
atiidud ,retvam Lsotisefo sigmte s eemooed ment etesd® 20d 

econsitodmi ett etuoedo' ot bewolls od tom hbinote ystotiqnute 
eoltst gnistiaups efit 'to yostuoos” off | yLbmo0se 

antinimistob ot oexy akedt to ceusosd troqmt aevotisce to ef 

eboivel ets soxst soorth siste edd dotiw noqm eteasd eit 

eit sviovart ot as satel oe won ek yvel state costib elstT 

gnome ssbird xet to eeititsupent esotree to yvtiLidtaaog 

benisiteoas ef tnsmnoisitoggs to elesd ef? 42e6Inu eettrssdo 


~~ 


83. 


with the utmost care, Indeed there is every incentive 

for the local assessors and the property owners to under- 
value property, since the reward is the escape of a certain 
proportion of the state tax. We have no doubt that there 
is a tendency toward a competitive under-valuation among 
counties, and we have already indicated our reasons for 
believing that the ratios do not accurately reflect the 
true relation of assessed values over the state. 

Thirdly, these ratios are used to equalize the 
valuations of steam and electric railroad properties in 
the different counties, Clearly the distribution of this 
aggregate valuation is of great importance to the different 
counties. If’ the ratio for a given county is in error 
by only 5%, this county will deprive the others of their 
fair proportion of these corporation taxes. 

In view of these and other defects of the process 
of equalization, we are led to conclude that this duty is 
too important to be entrusted to a board comvosed of state 
officials serving in an ex officio capacity. These offi- 
cials have their own duties to perform and their onky oppor- 
tunity of studying the assessment situation comes in the 
three weeks period during which they are in session as a 


state board of equalization. The task of equalizing assessments 


68 


evitneont yiove el sxodt boeebnl e180 saomtu edd dtiw 
-roban e¢ atemwvo ytreqorq oft bis etoaaeees feool ent tot 
atst19e9 8 to eqsoes oft ef biswoe1r ot sonte eUtregotg eulsv 
entah Gods dived tweak OC mad e4nde 0a ts noLtroqgotg 
gnoms cnoitsylsev-tobnuy evititegmos 8S biswos vanrobauee & at 
tot eamoeset wo betsolbhbnit ybsoetlts endl aw boe ,eottnsoo 
edt svoe[ter yLetsiyoos tom ob aolisi1 odd tacit anivelied 
| ledeée eft tsvo aeulev houadees to nottsLex autt 
euit estisupe ot beey ots gotta seontt eLberktt 
mi esitasqotq bsotl[is1r sttitosle brs msete to enciteuLey 
eins to sottudizte tb st yltseld sestiouoo tretettts edt 
tnerettib adit ot sonstirogmi ssery to ef moitsxisv Stsgetsss 
torre ai at Ytnseo fevig s tot oitet ens IT -seltnyos 
tient to etorto oft eviagqebh ILiw yutaos aisdt ke yino yd 
.eoxsd Rebgaseesee seent to neldzoqorg rtist 
eesootg oft to atoeteb tedto has easdd to welv aI 
ef ysub eins tacit ebufonoo ot bel sts ow no bteatiaige ‘te 
siste to beasqugd bisod 8s ot beteuitas ed ot Insttrogqmi oot 
-ftio osesdT «Yttosqes ofottte xo ne al gnivioes alsioLtto 
-toqgqo yno tLect tae mtcotrsq ot asitub awe atordd eves oleks 
edit ai aemoo notisuste dnomeaeees oxlt giiybute to ytinus 
& es mofeese mi ots bape doinw anitub Solteg exoow ssudt 


agnemeasees gatisitsupe to Mest ont efofissifisups to brsod etste 


84, 


is. too difficult and important.to be left to any ex officio 
board, however good its intentions, This work should be 
transferred entirely to the state tax commission which we 
have recommended. 
At the same time the proposed state tax commis- 
sion's power of equalization should. be broadened so as 
to permit of searching inquiry into the work of the local 
boards of equalization. The county tax burden is now 
sufficiently high in many cases to give rise to some com- 
petitive under-valuations in the different taxing districts. 
The cities and the rural districts have the same incentive 
to avoid the county taxes that the counties have to avoid 
the state tax. While it may be urged that a bad assess- 
ment cannot be entirely corrected by equalization, yet it 
is true that an efficient equalization is vastly better 
than a haphazard one and the power of correction, coupled 
with the authority of the tax commission to order orto 
make a new.a-new assessment places the incentive upon strict 
compliance with the law .rather.than upon easy going laxity. 
In view of the many complications which inevitably 
arise under any system of assessment on.a percentage of full 
value, we recommend the amendment of the tax laws to require 


the assessment of all property at full. value, Such a 


dE 


otoltto xe yas ot sisi od of Snadtogmi bas t{yoliiib oot al 
ed biuode zuxuow atd?l. .enoitnstnl efi hoog szsvowos ,bisod 
ew Moinw moleatemioo xsi otste oct ot Yertins, hortotensss 
.. ehebmemiooes overt 
-efninioo xs? state hoeoqotg est sott omse sit JA 
as of, bsansbsotd sd bivotea mottssiisups to tewoq a'nmote 
Isool odd to 2Atow ot otnkt ytiupal gnidorsse to, simreq of 
won al mobtuc xet ysnvoo ofT molsestisups to ebtsod 
~moo smos ot seit evig of eeaso ynsm at dgic yitnotoitive 
eetotuseld goixst tnstetiib ont mi enolstsulsv-1obau svitiseg 
evitneont saws oft over etotiteith Isiut oft bas. asitto. ofT 
biovs ot svat ssitnyoo edt tsdt sexss ytnuoo ot blovs of 
-eesees bad s tans bouts sd ysm ti olidw xed sista, oct 
th sey ,molcssifsups yd hetoo1tr0es yleitine sd tonnes tno 
awstied yvitesv el gotisstisups, tnefokits ns tect. outs. al 
belquco ,noitosttos to tewoq oft brs eno Dtssedgqed s osdt 
ot to it9hto o¢ moteeinumioo xst.cdt to ysitotius edd diiw 
toinate sogu evitneont ot eeoslg tnemeesees won 8. won. s oxsm, 
-Viinel gniog yess mnogu asdt stonter wel ont dtiw. sonsilaqmoo 
Yidstivent doidw amottsoifgmoo yasm oct to weftv. al 
ffui to, sgstnescteg. s no tnemeeceas to meteye yas robin selits 
sifupst ot awsil xet, ont to tnembnoms sit hbasmmoost.sw ,.sulsyv 


& soua -outsy [fut ts ytitoqote fis to tnemeesees sit, 


85. 


change would be looked upon by many as revolutionary, and 
its successful adoption would require very careful safe-~ 
guards in order to inspire full public confidence, 

In the first place this transition could only be 
effected under the control and direction of such a tax com- 


mission as we have recommended, Secondly, it should be 


accompanied by adequate statutory safeguards against local 


extravagance as the result of the enlarged basis of assessment. 
This safeguard could be provided by enacting that for the 


first year of such increased assessments the amounts levied 
in any district shall not exceed those raised in the previous 
year by tne higher millage rates on the lower assessed values; 
and for the second year an increase not in excess of 5% 

over the amount raised in the last year of the old system. 
After the transition had been effected such restrictions 
could be repealed, and especially so if, in the meantime, 

a system of budgetary control had been set up in accordance 
with the suggestions offered in this report. 

The system of assessement at full value presents 
numerous advantages. It is vastly more simple in adminis- 
tration since there is only one objective upon witli ch the 
attention of officials and taxpayers is fastened. 


Secondly, the effect of inequalities of assessment 


68 


bos ,.ytenoltuLlovet as Yes yd sogy Bsdool ed bisow epnacto 
-otse {utsiso yiev sticpst bivow nottqobs Sutesssoue ett 
~sonebitnos otidyq f{Lut erigqeni ot twebto ai ehbtsyg 

ed yimo biveo nmotttaneit eins eosig tetit ond al 
-moo xst s Move to moktoertb bas Lortnoo oft tebey betostte 
od bivode tt .ylbrooe@ .bobnsmmoce: over sw as soteein 
‘Isool tamtisss shisunstse yrotuteta steupebs yd hetnscmocos 


etnomeadaes to steed bosisine edt to tinest edt ss sonszsvetixe 


sit tot tsad antiosne y bebtvotq od Sivoo brsuyetse eataT 
beotvel etimuoms oft ednemeeeses bsesetont dove to tsoy text? 
auvotveig edt mi bsetst seort bosoxe ton L[Isre totiteib yas nt 
‘aoulaev boeaseas towol srt mo sotst onellim rendpin oft Yd isey 
8@ to aeeoxe ni tom seseront ns tsey broose ort tot bas 
smotaya blo ot to weey~ dasl ont mi beeta1 sawoie’ sid tovo 
anotsoizteas: move betosttes nood hen motsiensis ond vests 
~omidnsoen ont afk .tL oe yllstoeqes buns ,beleeqe1 od bivoo 
eonsbtooos mi qu tee need ber Lottnoo yreteghud to moteye s 
estrogen atdd ni betetto eroitesggue ont Attw 

etneasigq oulsv Iivt ts tnémecesees Io meteya oT 
-einimbs at sfqmtea 9 Ton yisasv ef sTI eeegstnsvbs evotonmunr 
ost ito Fite nogy evitostdo omo yimo ak exert sonte nottert 
ebonstest ef eteyseqxet bos alstottto to ncttnetis 


inenmeesees to asttilsupoent to tostts ent ,yibmossd 


86. 


is diminished, for the change to full value will in itself 
compel greater precision in appraisal, and the taxpayers, 
as well as the officials, will be more alert to the accur- 
acy of the results. 

Thirdly, such a change will be of great significance 
in furthering the efforts of the state to attract outside 
capital for investment. There can be no question that 
the present high millage rates are an obstacle to the out- 
side investor, who sees the tax rate as a certainty, 
while the actual basis on which he as a foreign investor 
is taxed, is a matter of great uncertainty. 

Finally, the assessment at full value is the 
only means by which the state can give assurance to the 
taxpayers that the present constitutional rule of uniform- 
ity is being observed and applied. 

For all of these reasons we recommend, as a part 
of the reconstruction of the state's system of taxation, 
the introduction and diligent enforcement of the full value 
basis of assessment of all property subject to taxation. 

The policy of effectual centralization of tax 
administration which we are here recommending should be 
extended and completed by transferring to the tax commission 
the administration of the inheritance tax and the duty of 


assessing telephone companies and all other public utilities. 


38 


tleatt at LLiw outlay Low ot egassio esis tot .bexie nbmty et 
.eteysqxst ont Bae issletqgs at notetostg sPrners Leqimoo 
-tuoos ord ot Srofs stom ed Ifiw .eleloitto ont es Iflew as 
| eativest ont to Xa8 

déelee \Si iain: tsotg to ed {fiw sgusso s dove VibtidT 
sbiatuo foortts of osdsde oat to ettoits ont guts oxen at 
Perey nolinesp ost ed m89 oxedt wtnonteovak to? fetigse 
-suo0 ot oF efostedo NS ets gets egsiiia tigke ‘tuscorg my 
«Ytalstiso s 8s sist xst oft aose ow stodsevaot oble 
toteoval agietot s es of doidw no atesd sautne, ont oLisiw 
eYtniastxreonu sSsety to s9ctsem s at ebexst at 

efit al oulsv {int ts tnemecoees orld Xi Lome 
eat of sonetwaaes svig mseo oisse ond coidw yd ensem yfno 
-mrohiny to elw1i fsnoliusistaneos teeexc ors tact eteysaxst 
ehetigqgs bite bevtsede gated ei yol 

Srna S as ,bnoumooet sw anoess: geod to Ils tod 
actitsxss To meteye etstste ont to noisourtenooet ont to 
eutsv [fut sxt to Srigai9 9 tOi ne gnesifiib bus moftouborin£ ort 
eMoitsxss ot sosidua ytusgqota Ifs to J eeste goans To alasd 

xst to goitasifarines Isutositte To yoilog ont 
ed bivore poibnemmoost sien sis ow Moidw notssitetnimbs 
fofee limos xsd esit ot gnitistensit yd betofqmoo bus bebrestxe 
to yiub oft bos xst sonsiiazonnt ont to molisiteinimbs sit 


eeltcittty ofiduq tefte [fs buns esesinsqmoo snonqsIst gnieeseas 


87. 


We have already discussed the reasons for the 
latter recommendation. The inheritance tax belongs under 
the jurisdiction of the tax commission because of the im- 
portance of the appraisal of estates and the other admin- 
istrative features of the tax. The reasons for thetrans- 
fer.of this tax to the attorney general's office by Ch. 7 
of the Laws of 1921 are familiar to the public. Without 
minimizing the legal side of the problem, we are disposed 
to hold that the purely administrative features of inher- 
itance taxation are of such importance as to justify the 
return of this tax to the jurisdiction of the proposed 
tax commission. The yield of this tax will depend upon 
the completeness and accuracy with which the inventory and 
appraisal of estates are conducted, and the special taxa- ~ 
tion authorities of the state should be given full powers 
of investigation and review of all such proceedings. The 
ordinary legal routine may be handled as it is today, by 
counsel assigned for the purpose from the attorney general's 


office, or by the commission's own legal counsel, 


oft tot emoasot oft hesevoetb vbseils sven oW 
tebnu agnolsed xst sonstiztenal ondT ;noLdabienmooe: settal 
-mi oft To sausoed Moieeinmoos xsi anid to softotbelaut, ont 
eritmbs tetto sit bus setstes to Isetsiqqs odd to eonst10g 
eansiseit tot anoasst siT -xet oot to estutsst ovistsiiet 
§ .f9 yd eottto e'fsrenes yomtotts odd ot xed eft to tek 
tuodttW .otlduq od of tetitmst ers ISL to ewad ond to 
beeogeth sis ow ymeLdorq ext to ebie Iagel old antsiminimn 
“ caorint Yo eetudest oviverteimtmbs ylersq oft dard blo of 
ent yiiteau, of es sonsdzoam: dove To o1s tottexs? eonsdt 
| beaogotg sit to noltobbelaut sit of my: eicd to austen 
mnogu bneqeb Iitw xet etdt to blety sdAT wtoleetmmoo xed 
bus Ytotmnevar edt sofdw itiw yosts.08 bns eeenstelgqmoo odt 
~ wesxst Istoece st bas . bot oubmoo sis eststas to Isetstags 
anewog Ifvt mevig od biwode etste ont to eettixoctue noit 
eff .agntbseocorq dove Ile to weivet bas nottsyitesvat to 
vd ,ysbot ef ti es belhned ed yem entévor Iezol yrsentbto 
a'istones ysntotis esit mort eaoqai eit tot bengtees Ieensoo 


Isanvoo fegef swo a'noieeinmoo orld yd to ,soitto 


88. 


CHAPTER IV. 
SCHOOL FINANCES IN WASHINGTON. 


Article IX, Sec. 1, of the constitution of 
the State of Washington is quoted below. This is the 


only state constitution using this language: 


"State's Duty to Provide for Education of 
OGhildren, It is the paramount duty of the state 


to make ample provision for the education of all 
children residing within its borders, without 
distinction or preference on account of race, 
color, caste, or sex. 
All educational authorities agree that the State 
of Washington has a school system notable both for efficiency 
and for cost. In 1910 it. was ranked by an expert of the 
Russell Sage Foundation as standing at the head of the 
states of the Union on the basis of school attendance and 
expenditure of money per school child. 
Few states spend so much for education in propor- 
tion to their wealth and population as does Washington. 
For the last year or record, 1921, the state spent $28,493,158 
for its grade. schools and high schools, and $2,778,000 for 
its higher educational institutions, comprising the state 


university, the state college, and the normal schools. 


This does not include the amount expended on schools for 


eo NI aT TARO 


WOTDUTHEAW HS CEOUALLE OCHS 


to mottusitanco edd to .f .092 .XI eLott1A 
ads ef eLdT ewolod bstoup et notgnidesW to ssata orlt 
regsugnel eist gutes moltutivanco etste yino 
Ife to notésoubs sis tot molaivorg sigqms. sism oF 
tuodttw ,atebtod efi midiiw gnibfes1 mexbiIido 
(296%,.to smvooos no gonetetetg to nottoniterb 
-x9e@ to ,otes9o ,toloo 
etsié oft tact serge esisizofitus Eeditc cube ILA 
yonototite tot atod eldeton mote ye Loorfoe s aad ‘odgniteaW to 
edt to trecxe ns yd bednms:t asw tt OL€L nI .teoo tot bas 
sit to bees odd ts guibmete ec motésbasol sgs2 Ifocauh 
bas eonshietts Loondoe to etasd est no motav exit to ‘eotate 
eb{idko Looroa teq yYonom to enud tbnogxs 
-toqotg mi moitsouhbs tot doum oa bnecge eciste wot 
sNotaiinesW aeob es noiseluqog brs séieew ttedd of aotd 
BEL ,ECD, S88 tnoce etste ostd .£8er _px098t to asey deol edt tof 
tot 000,8°",S¢ base .eloonoe dein bas eLlootfoe ebsts ett cot 
estste oft gmteirqnoo .,anofttwiifant Isnotisoube tenfgid act 
eeloodoe Ismton oct bins ,egeltfoo etsta sit ,ytiersviau 


tot aLoodoe mo bebnsqxe snwoms oft obufoni tom esob aint 


89, 


defectives, or on reform schools. The average total 

cost of education in the common schools in Washington 

for 1921 was $123.14. For the year 1918, the latest 

date for which figures are available for purposes of 
comparison, the average cost per pupil attending public 
schools was: $78.31 in Washington; $60.99 in Massachusetts; 
$12.32 in Mississippi, the lowest in the Union; and $49.12 
throughout the United States. 

The records of the state superintendent show 
that the current cost of education per school child has 
increased from $49.52 in 1912 to $97.85 in 1921. The 
accompanying graph represents the annual increase in cur- 
rent expenses for education compared with the average daily 
attendance and the wealth of the state. 

The sources of support for the state system of 
education are fourfold: (a) invested funds, (b) state tax- 
ation, (c) county taxation, (d) district taxation. To 
these sources should be added the contributions made by the 
federal government to the state college for the encourage- 
ment. of agriculture and to the state department of education 
for vocational training. 


(a). The state possesses $17,260,771 invested 


{stot egstevs oT -eLootioe miotert mo to ,sevitosish 
sotenidesW ot efLoorise mommoo ont mi moktsoubs to teoo 
gests oft ,8f0L assy ont tot eDbL.ESL% asw [SCL tot 
to eseoctua tot eldslisvs wai sesuaht slo iciw tot etsb 
oifduq anibnestts Ifquq te¢q teoo SBSISVE ond eMoaiisqmeo 
satteaucdoseash ni CC.08@ :notuntdesW ot [€.85$ :esw pitoatea 
SI.ChY bias sien La ont nt teewol ont ,tqgiealeaili mi STORED E 
-cotseta Sstinv ont twotsuouts 

woile insbretniteque stste ond to “ers odT 
earl bitcdo Loormoa szsq motisoubs to teoo tnoxrrwo ons tadt 
ent .fS9@f mt 68. Vek ot SICL mr SE.CbG mort beesotont 
-tuo mi sesetort Isunns ont etnoresiqget Sgqstg gaiyasqmooos 
Ylish sgsrtavs sit ditw borsqnoo moitsoubs tot aseneqxe thet 
sotsta ot to dtisew ed bis sonsbnetts 

to mesteye etste ont tot txrocque to esotvoe oT 
~xst otste (d) ,ebnut boteovnt (8) rblotiwol sts motssoubs 
of .wnottsxst totateth (b) .mottexst yinvoo (9) ,notts 
ems yc obsm enoistwdiitnoo elt bebbs od bilyucsde. esotmoe seorit 
-o2g6tvoons oft tot egelfoo stste sit o¢ tnemntevog Istobet 
mnoftsoubs to tnemtusasbh etete ont ot bas sivtivnottgs to Faem 


eortinisis L[smoritsoov tot 


boteovakt LYT,008, VIG eeeesceod otsta oT (8) 


90. 


funds for educational purposes, $208,150 of which are de- 

signed for the state university, $1,182,195 for the state 

college, and $15,870,926 for the common schools. The in- 
come from these several sources of revenue should be added 
to the income derived from taxation. 

(b) State taxes for education in 1921 amounted to 
$9087 ,147.91, representing a levy of 5.34 mills, or 
$20 per school child in accordance with legislation passed 
by the extra session of the legislature in 1920. 

The amount of the contribution which the state 
should make to the cost of educating the individual child 
is a matter of judgment on which opinions differ greatly. 
In 1895 under the so-called "Bare Foot School Boy Law", the 
state for the first time recognized its responsibility for 
aiding elementary education by appropriating $6 per school 
child. This was increased to $8 per school child in 1898, 
and to $10 in 1901. The total amount so expended advanced 
from $646,600 in 1895 to $1,300,902 in 1901. The state's 
contribution was raised to $20 per school child in 1920 
and the amount of state aid in that year was $5,730,834. 

At the same time the total cost of education in the state 


swelled to $20,789,846 in 1920 and to $28,553,333 in 1921 - 


08 


-9b sis doiflw to O&€f,80S% .eseoqiuc Lanottsoubs tot ebaut 
eteda old tot CCL, 881,18 .viteteviny otste od tor bongte 
ent off  sefoorida mommoo sft tot ose.Ove. erg Bas jegertto 
bebbs od biuode eunevet to esotsoe Lersvee eaemt mort sas 
sottexsd mort beviteb emodnt sit” od 

ot betnuoms IS@L mt Hottsoubs tet eoxst esse. (d) 
go ,ailtm B82 to ye s gnitneesrqet ,£@, TAL, SBORS 
hbeeesq noiteletgel dtiw sonebtooos nt bite foonloe teq OSe 
| eOS@L at emseletnel ent to moteese sitxs st yd 

edste ons dotiw nottndtitnos oft to tnvoms oat 
biints Leuvbivibat ontt’ yaideoube to teoo° ont o¢ exsm biyoce 
Vyltserg tettib enoinigo Moitlw ne ¢nemgbut to rettem eB et 
ait "wal yod Tootloe soot o1sd"® belfeo-oe ont tobny deSl nT 
tot ytilidtemoqeot ett bostmgoce: omit textt oft rot siete 
Loodoe t9¢ ag gotisingotgqgs yd noitstsoube visinomelo gnthis 
.8C6L at biltio Loorloe 19q 8% ot bezsetont esw eidT .bLtsfo 
beonsvbs bebneqxe oa tnyome Letost oXT .f0@L nt OL$ of bns 
atetete oft  .L0@L ni SOC,0CE, Ie ot CeSI at 006 ,d48¢ mott 
OS@r at brits Looffoe tog O88 od beetet esw mottudintnoo 
~bE8,087, 88 esw tws9y Sodt mi bis sista to tnvoms oft ns 
esete silt at motdsoubo to teoo Iatot sit ontt omse ont tA 
- [S€f mk SSE ,Ece 88% oF bas OSCL mE SB8,CeN,0S% ot bellows 


BY 


91. 


an indication that the districts as well as the state had 
increased their expenditures. 

The facts do not seem to justify the expectation 
that if the state should give more, the districts will 
give less. 

(c) The amount assigned to the counties, $10 
per school child, has not varied in recent years and does 
not seem to be an occasion for dispute. The total cone 
tributed by the counties in 1921 was $3,730,723.31. 

(d). There are 2,595 school districts in the state 
which raise by local levy the balance necessary for educa- 
tion in the districts in addition to the amount contribduted 
by the state and the county. These districts vary in 
wealth, in population, and in educational policy. They 
are restricted by law to a levy of twenty mills. The dis- 
trict levies for 1921 amounted to $16,289,382.24, which was 
55.96% of the total amount raised by taxation for educational 
purposes. 

That education in Washington reaches adequately 
the majority of the children is shown by the following facts: 
147,652 children attended school for 181 days or over, in 
1921; 139,693 attended ._ school for 161 days or over, but less 
than 181 days. Only 7,768 had less than 160 days schooling. 


Le 


bet stete ont es Ifow es etoliaserb odd tans aotseothal ne 
|  ,gerutibasexe thets beesotont 

noléstosqxs offs yYtttast ot moose tom ob etost ont 
‘Lltw ‘etoitseth eft .Stom ovis otuorte etste ott SE ‘tent 
cf . seaol evis 

OL@ ,asitnawon et ot bongtees tnvome siT (09) 
“es0b bas etssy Sndcet of better ton esd ae foosos teq 
qxoo Le'tot siT * .etugetb tot fofanooo as ed ‘of moose tor: 
@fE.EST ,0S9 58 esw ISCL nt eetinvos ont vd besud itt 

otsts ent mk atotitetb Loose 82,8 ors oven? (b) 
-S9UD9 ‘tot yrseacoen oonsisd odd yvel fsool vd Sselst > ae ip 
botudtttdos davoms edt of mottibbs nt etottdeth ostt ot nott 
at yrev atointeth sesdT .ydnuoo ont bas atasea eid w 
yout . yotlog Isnottsoube at base motte Lagoa at ult Leow 
~aib ofT ~ .eliim ysaews to yvol 8 of wal yd betotitest 91s 
asw doidw ,bS.S$5€,C8S, ale ot bedavoms ISel 10% asivel toiss 
{snottsoubs tot motisxs? vd beetet tnvoms Letod ont to Oe, ee 
. ‘ aseoqrug 
yletsupsbs estiose: hodgmivesW ot nottsoube ted? . 
:atost gntwollot sit yd mwode at asibLisfo cit to ythrot.sm ant 
gt .1sv¥o'to eysb I[8f tot Loodoe bobnstis nexbL isto SG0, vet 
eeol gud .t6vo ro eyed [dL tot Looroe bebastis 5C5,eEL “reer 
eantfooroe ave O8f msdt eaol bed 8,7 yLnd ig A 81 rectt 


92. 


These last were pupils in remote and poor districts, 

where adequate educational facilities could not be fur- 
nished. In some of these cases relief can best be afford- 
ed by direct appropriation of the state board of education, 
and in other cases consolidation of adjoining districts 
will provide a more efficient education for a longer period 
and will reduce the cost per school child in the districts 
which are consolidated. 

When your committee compares the cost of educa- 
tion in Washington with that in other states, bearing in 
mind their wealth and their population, and when it dis- 
covers the steady increase in the cost of education within 
this state without reference to the state's population or 
wealth, we feel compelled to urge the suspension of further 
increase of taxation for school purposes until the taxable 
property of the state and its population have relatively 
increased. 

There is no question that some school districts 
are not now getting the educational requirements that it 
is the state's duty to provide, even though the people of 
those school districts are levying as high as twenty-eight 
mills upon themselves to give this education. It is also 


true that there are other school districts in the state 


eS@ 


,atoirtetb ro0og bas stoner ak eliquq stow test oessT 
«tut od tom bfLyoo aettiliost Isnottsoube stsupebs stortw 
ebtotts ed taed nso tetfoex acess seats To emoe aI bede tr 
wroitsoubs to bisod otete sdt to nolttetscoqos toetib yd be 
eatotitetb gnintotbhs to motishtfoenos eases remso at One 
boiteq teynol s tot mottsoubs gnstoLltis stom s ebivoiq ILfw 
atotiicth oft mt bLtrio Looee teq taco ont ‘eoubex ILiw bas 
| bedsbhtioanoo sis dotdw 
-soubs to deco edt asteqmod sotdinmod twoy aed | 
nt antised ,eetete rodto nt tact dtiw notanimesW at mott 
eeib i nosiw bua ,motdeluqoq thedd bas Atisew tlett batm 
nidtiw notteoubs to geos oft mt sesetont vbsste odt exrovoo 
£0 ands Riereet ateotste ont o¢ sdmetetot tuorntiw etste atds 
tontinvt to notenegese ot egiy of belleqmoo Leet ow .Atieew 
eidexet ont [itn eeeogiug Loose rot mottexst to cesetont 
vlovisster avsi nottelugqog ati bas otsiea ort to ysreqord 
| | .bsesotont 
atotiterb LIooloe emoe tert notieoup om ai orenT 
$i gjss adnonetiupst {snoitisoube ois antitteg won jon sits 
to elqoeg ert aguodt neve ,esbivorg ot ytub stotste ort at 
Siigto-ysnowl as fei as goiyvel ers efointeth Loodoe seodt 
oefs et $I eMoissoube aids evis ot esvisenedt mnogu allimn 


otste ott mt efotttetb footloe renite ote erent terfd outs 


93. 


in which the number of scholars may be materially less - 
or more, it makes no difference = but in which the assessed 
value of the property of the district rT so great that they 
haveomore money than they know what to do with and it is 
often spent on high class gymnasiums, teachers cottages 
and apartment houses, water systems for rural comnunities, 
playgrounds at a distance from the school grounds, and in 
other unusual ways. ‘These expenditures must be checked, 
but we submit that they cannot be checked by continuing 
the present system, 

The whole school fabric is working upside down. 
The state should levy and collect taxes from the larger dis- 
tricts and be able to use the money in the poor districts 
without being required to pay to the rich districts the 
same proportion per census child as is paid to the poor 
districts. The only way this can be accomplished is by 
changing our system so that the state will prescribe a min- 
imum of educational requirements and require every school 
district to levy a tax sufficient to meet these requirements. 
If any district after levying the maximum amount in order 
to meet these requirements falls short of the amount necessary, 
the difference should be made up by levying a general tax 


for that purpose, In this way the state will not be paying 


- easel yilsizetsm ed ys ateforoe to redmun oft dotdw af 
beesoaes ort doinw nt sud - sonesrottib of eeen ti ,otom to 
yous ‘tend tdorg of at Sotxtetb oft Yo ysroqodg ett to ontav 

et ti bus dtiw ob of decw wom yedt nad Yeon otom ovad 

esgsitoo atenossd penutasnangy eesfo feted no tnege nefio 
,eottinuamoo fetu7 tot ameteye tetew ,esavonl dremirscs bre 
nt bas ,eabruorg Loomoe eft mort sonsteib s ts abnuotsyste 
.bexoodo od seum estutibsaeqxe saedT ayew Isveuns toslto 
gutuntinos yd pbexoedo od tonmso yout tant timdua ow tid 
| |  ymeteye dnseotq sxit 
cnwob obleqw ynttsow ef ofadst Loordoe éfodw od? 
eaib ténisl sit mort ‘asxst Fostios bas yvoel Bluone odste ont 
ddotxd ets 100g eft mi yorom oft sax o¢ olds od brs atoitt 
edt etotitetbh dots efit of ysq of betidpet guted tuyortsiw 

‘toog ect of bisc at as bitto everiso 19q nolstocotg emce 

yd ef hesle tiqmooce od mso aint ysw YLsto 6d?  .etoixtetb 
enim se oditocetq Iltw state odt tac o@ moteve two arianerto 

foofoe ytevo situpot bas atnenettupet Isnotssosbs to mm 

.atmomsittupet eaedt teem o¢ dnetoftive xst s yel ot totrtatp 
tobto ni Snyome mumixesm oft gniyvel refie fotitethb yas tI 
eViseesosn Snvoms oft To txtome af{sl atnemetivper eaesdt teem ot 
xsi [S8ienes se aniyvel x gu Obs od biuode esmotetttb oxtt 


goiysq sd fon Iffw siste oft ysw etct al. “, 9800%Na fant tot 


94, 


school money to any district that has sufficient property 
within its borders to carry its own burden, There could 
be no objection then to one district having greater educa- 
tional advantages than another and there would be no dis- 
tricts in which the scholars are not having a full nine 
months school term with competent teachers. Then if the 
people in the so-called rich districts saw fit to burden 
themselves for additional frills nobody should complain as 
the state would be losing nothing and the districts then- 


selves would be carrying the load. 


CHAPTER V. 


OTHER SUGGESTIONS AND RECOMMENDATIONS. 


We here present our comments, suggestions and re- 
commendations on certain specific proposals which we have 
studied, or which have been urged by persons who have ap- 


peared at our hearings. 


he BUDGHT; 
We have referred frequently in the course of our 
discussion of the state's financial problem, to the importe 


ance of a comprehensive control of revenues and expenditures. 


2h 


yttecotq tnetotttua esd tacit toinrtelb yas ot yonom Loonoe 
biyoes stedT o.nsbisd mwo ati yrtss ot exebiod esti nidsiw 
-soubs tetesin anived gotitetb smo ct mond mottostide on sd 
-etbh omved bivow oredt has torltons osdd esystnevbs Lenolt 
enta fflut s .gniven tom ots etelodoa edd dotdwint atoiat 
Yensoks mod? .etshosses tneteqmoo dsiw mrod Loodoaadinom 
‘mebiud o¢ tit wes atokitelh doft beliso#soa' sft nk siqoegq 
as ntsfqmoo blucte ybodon elLitt: {[snoltibbs tot eeviseme dt 
Wield atoingetb oft buns gnidton gnteol sd bluowstste sat 


-bsol st aniyirsoved  bilyow seviee 


J AE TTARO 


- aol QONA CA euo0lTedonve ASHT 


~m9% Dose enottasnaue ,atnenmmoon tuo sSnsactq sted oW 
eves ow doidw alsaoqotq ottiosge nissiso no encitsbhbnsmmoo 
-qs svad ofw anoeteg yd besgic need eved doftdw to), beibute 


-egiiasod iso $s bersec 


;Eaoqug «=. L 
yo to setsoo st al yiineupsrt petretst eved sW 
estogmt sit ot ,.meldorq Isionsnit a'stste ont to nmokeawoerh 


eacxstibneqxs bas esunsver to Lordnoo svienerisirqm0es s to sons 


95. 


This control is fundamental to economy and efficiency in 
public administration, fir it is evident that there can 
be neither efficiency nor economy in public affairs while 
there is lack of coordination between the revenue-raising 
and the appropriating agencies of government. 

This coordination of our financial system can 
only be effected by means of a budget system, by which 
there will be brought together in a comprehensive plan, 
the estimates of revenues and expenditures for the fiscal 
period, with adequate authority to control these estimates 
and the financial operations of departments in the interest 
of the general public. In the course of our public hear- 
ings over the state, no single topic was referred to as 
frequently or with such approval as the subject of the 
budget. 

Those who advocate the introduction of a budget 
system as a measure for the promotion of greater efficiency 
in public affairs are sometimes inclined to think of a single 
budget which will give control over local as well as over 
state expenditures, This is obviously impossible. We 
are obliged, therefore, to distinguish in our discussion 


and in our proposals between the state budget and the means 


ce 


at youstotite bus ymomooe ot LIstnomsbhbaut al Lottmoo etAT 
ms9 etodt tend tmobive el ti skto,motisttetaiombs otidug 
elinw exrtstis olidygq mi ymonoos ton yonstotite teas ton od 
gutaist-ounsvet odd meowssd soltienibicos to Aosi ai exert 
etnsmntevog to asioness gaitstigoigqs sdt bas 

nso seteye fetonsnit tye to aottsnibtoos aidT 
Motdw yd ymesteya dvoghud s te ensem yd betostts ed yino 
slg osvianoderqmos s ai tedtegos tdguotd sd ILiw oxosis 
feoakt odd tot estutibneqxs bas asunevet to eetsnites ont 
estemistes saomt LIortnoo of ytizrodius sisupebs dtiw.,bolieq 
teotstat odd alt atnomdtsecsb to amoissiego fsionsatt eds bas 
-1senm of{dyq two to sexvoo eat al -olidu¢ [etenes ont to 
as ot berrestes1 esw oftqos elyniea om ,state oft tevo agnt 
edt to tostdye oft as Levorgqgs dove ditw to yléasupsit 
ee $e t etopbud 

teabsud.s to motiouboital sds otsoovbs,, odw. sa0dT 
yonstotite todse1g to moLitomorq st t0b atveson s es moveya 
efanie s to anitdt of bonifont eomitemoa ois atisits olidugq ni 
tovo es [few as Isool tevo Llortnoo svig »iliw doidw topbud 
3W ~S8ldteaogmt ylasotvdo et elfdT .eetutibnoegxs siste 
noteevoetbh two mit Aetupmitetbh of ,ototetedt ,begtido ers 


ansem oft bas tegbud steve sis neswted efsaogotg Ivo mi Anas 


96. 


of budgetary control over the thousands of local spending 
units. 

The State Budget; 

The development of budget legislation for state 
governments has gone on very rapidly in recent years, until 
today almost all of the states have taken some action look- 
ing toward more business-like control. Twenty-four states 
have so-called executive budget laws, under which the gover- 
nor is responsible for the initial budget plan, and twenty- 
one states have provided budget making authorities of the 
board or commission type. Through the administrative 
code of 1921, Washington has teken the first necessary step 
toward a budget system in providing the administrative co- 
ordination of the state departments and the means of com- 
piling the information relative to expenditures upon which 
the budget must be based, 

On this foundation it will be a relatively simple 
matter to build a satisfactory budget system for the state 
government. We do not consider it necessary to elaborate 
the arguments in favor of a state budget, nor the details 
of the plan. We recommend the introduction of the executive 
type of budget, whereby the responsibility for the budget 


is placed upon the shoulders of the executive, who should 


gntbnege Isool to ebnsewodt ent teve Lorénoo vietesbud to 
A bE Pe Oe Pee voting 
“tombe otese edt 
gtsta tot nottsletgef teybud to snemqoLevebh oat 

[tiny ,etsey tisoet mt yfbiqst VIS io eros aed adnommrevog 
-toof mottos smce meted evel astste edt to [fs taomfs yebot 
gotste tvot-yssowT eLottnoo sxfleeconteud etom btewot ant 
-ISV03 ont dotsdw tobaiy ,ewsl topbud evisuosxs bsliso-o8 ever 
-yinew? bas ,asia togbsd fetdint odd tot eldtenoqeet ei tom 
‘ad “Yo dststrosddus yotuem toybud bebivorq eved eotste eno 
Svissiteinimbs eft davotd? .sqys noieeinmos to bisod 
gote yuseesoon faxit oft nedes eat not snidesw ,IS€I to eboo. 
woo Svitstteininibe off gnibivotg mi meteye tosbud s brewot 
-moo to enesm sit bas adnomd raced sisse ort to motdentbro 
doinw moqu eotusibuegxe ot evissfet mottamrotnt sdt gntfica 
|  beasd ed teum tegbud edt 

efomte yflevissfer s ed Iltw tt mofttsbhnvot eldt nO ae 
stste oft tot moteye fexbud ytofosteites s billud of tottam 
etstodsis of yiseesoon $I tobtenoo tom ob oly . trommrevos 
alisteb eft tom ,tesbud edste 8 to tovst mt etnenue ts edt 
evituoexs off to motsoubousat eft brenmooet oW .nelo ont to 
“Segbud ols tot ystlidienoqes: eds ydetedw ,tezbud to says 


biyone onlw .evituosxs oft to eteshivode ent nogqy beosiq at 


97. 


compile, for submission to the legislature, the estimates 
for the various departments of the state government. 

The executive budget is to be preferred to the 
board or commission type, first because the executive has 
the final responsibility for the operation of the state 
government and he should bear as well the responsibility 
for its finances; second, having this responsibility, the 
executive should possess adequate and final authority to 
control the details of the financial plan; and third, be- 
cause the people will hold the executive responsible for 
the results, whatever the system of planning the budget. 

The crucial feature of any budget is the status 
which this budget hes before the legislature.. In England, 
where budgetemaking has attained its highest degree of per- 
fection, the budget as submitted becomes a bill for the 
consideration of the House of Commons. Proposed expendi- 
tures may be reduced or eliminated, but may not be increased. 
The recent budget law of Maryland provides: 

"Neither House shall consider other appro- 
priations until the budget bill has been finally 
acted upon by both houses and no such other ap- 
propriation shall be valid except in accordance 
with the provisions following: 


"(1) Every such appropriation shall be em- 
bodied in a separate bill, limited to some single 


rau 


estanttes edt ,erutsfefael odd of moleetmdvea tot /efiqmoo 
etnoemmisvos siste odd to etmemtitsqedh exoirsev oft tot 
ent otf bexrtstetc sd ot et tegbud evitsosxs ofT 
asi ovituoexs ot seusoed serflt ,eqyst noteelmmoo to busod 
state sit to moitsatego sds tot ystilidtenoqest Lantt: eat 
Utifidtamoges: sd [few as sed Sivode of bane taenurrevoy 
ens ,ysilidtenogact eidt antvsd” , biroose ;esonemtt es bf) 10% 
ot ysttrontus Isntt bis etsupsbs sesegog bivoile evi tvoexs 
-od ,btids bus :nafq f[stonentt ofs’ td eLtateb edt Lortmoo 
“got aidfanogest svituoexs oft blond Ifiw ofqosq ant sauso 
etogbudt oft agninnslq to metaye sft tevetadw ,etiuast ont 
autste oft at teabitd yits to otusse% L[stouto oA? 
bnsignt mI LetutsletgeL£ oft etoted asd tegbud etdt doinw 
=t9q to ss%g9bh sesdyth ast Sentstts asd antusm-segbud storlw 
edt tot Ifid s eemooed hetitntive es togbui os .nottoet 
-ibnogxs Sbseocortd -eronmo) to eéveH sot To acttsitobfenoo 
.beasstont of tom ysm tud (botsntintfs to bsowbsr ad ys aot 
:eebivotq Dosivtsii to wel tegbud Jnoeser sciT 
-otags toilto tabtemed Eisde senoH rodt lo" : re OF 
yilsentt mood esd [Lid togbud oft [fins anotisirzgq 
-qs todto dous on bus asavol tod yd mnogu bhetos 
sonsbtooos ak sggeoxs biisv ed {isde gottsiitqorg 
taniwollot enofeivorg ont dtiw 


-ms od Iisa aottstiqotags dove yrova (L)* 
esiunte simoe of Dstimi{-,{fiid siersqee s mi bofbod 


5.8 | 


98. 


work, object or purpose therein stated, and 
called therein a supplementary appropriation 
bill, which supplementary appropriation bill 
shall provide the revenue necessary to pay 
the appropriation thereby made, by a tax, di- 
rect or indirect, to be laid and collected as 
shall.be directed in said bill." 


The above limitation does not apply to an appro- 
priation to provide for the payment of any obligation of 
the state. The general assembly may amend the bill by 
increasing or. .diminishing the items therein relating to 
the. general assembly and by increasing the items therein 
relating to the judiciery but except as hereinbefore speci- 
fied may not alter the said bill except to strike out or 
reduce items therein, provided that the salary or compen- 
sation for any public officer shall not be decreased dur~ 
ing his term of office. 

The Nebraska budget law of 1921 contains the 


following section relative to the same matter: 


"Sec. 12. Appropriation bills submitted 
to legislature. The Governor shall also submit 


to the legislature at the same time he submits 
the budget, copies of a tentative bill for all 
proposed appropriations of the budget clearly 
itemized and properly classified, for the en- 
suing appropriation period, and no appropriation 
shall be made in excess of the items and recom- 
mendetions contained in the budget unless by a 
three-fifths vote of each House of the Legisla- 
ture, but any item or recommendation therein 
contained may be rejected or decreased in amount." 


The details of financial control are being rap- 


i@ly standardized in those states which have already 


~8@ 


bas ,bet¢sta mtotent seoqtyc to tostdo .awtow 
motisitqotags yrstnomelqqua:s mtatendt beliso- 
{fid noltstirqotqas yistnemelqque dotdw ,iftd 
“yeq ot YIsaasosa sunevet ont shivoic [isda 
eih .xsis wd .,ebsm yotends nottstiqotqes ont 
as betoolLoo bas HbisL» ed ot ,toorktbat to soox 
",[fid bise at betostib ed Iisa 
-otgas as ot ylggs for esob aoLtst imi evods eT 
to moitsgtido yas to tnomyeq eft tot sbivotg ot nottsitg 
yd [Lid edit baoms yeu yidaseas Istemsg ofT .odate ould 
‘of gnitslox nkotods emeti ont gaidetn med. ‘£0 patesoront 
nbotost amsd t ont gaiesetoni yd bas yldmeaes Leroneg onld 
-tosae stotednisred as stqsoxse dud visto lous, ot ot antialox 
to tuo suitte of tqeoxs Iftd bisa ont astles tou ysm beft 
-nogmoo to yisiee add ¢edt bobivota ,aiesomdd emeti sober 
tub beaseto9b ed gon Ifsde zsolitto otldua vis ‘tot aolisa 
e290Ltto to mrot ated gat 
eit anistaoo [Sel to hy: Jomheat Sxesideil saT 
stetiam omse oft of evitslet softoee ontwoLfo? 
hoststindue allid eel SL 2998" 
t$imdwe osfs [fsde tomrevoD saAT -otutsletigel ot 
atindya orhemtt omse ont ts stutslelael sdAt of 
ffs tot Ifid evitsinet s to esoelqoo ,tegbud edt 
yiusefo togbud odd to anottsticotcqs bseoqotgq 
ens ofS tot .beittees{o yiteqotc bas bexiImest 
molssfiigorggs on Sais ,boiteq nolisitgqors¢s gaive 
-m009r Drs amatt odd to easoxs ‘nt obsm ed Lise 
e yd gesing tozbud ods at bontstmoo anoltsbnom 
-slaftsot oft to sauol cose to stov adtttt-sens 


atetodd ‘notéshbromsoost to moti yus tud”, od 
",dnvoms at haesstosb to bstosts1 od yem bon istaoo 


-qst gnied sts Lotsnoo Isfonsnftt to elistob osxT 
yhssifs eve dotdw eetsta seodt ak besibrsbuste ylot 


99. 


introduced the budget, and we may pass over these matters 
here, 

The introduction of the budget would possibly 
necessitate some changes in the manner and time of making 
the state levies, but those matters could readily be ad- 
justed. Today the state equalization committee decides 
on the state levies in advance of the bienxial sessions 
of the legislature, anc in advance, therefore, of the 
appropriations which will be made. Under the budget sys- 
tem there can and should be a closer coordination of levies 
and appropriations, since the one measure will carry both 
the appropriation and the tax rates or levies necessary 
to meet the proposed expenditures. It is essential in 
any budget scheme thet the audit be made indepentently of 
the agencies which prepare and administer the budget. The 
state auditor is a constitutional officer, and his authority 
should be extended to permit a full and complete audit of 
all transactions dealt with in the budget. 

Local Budgets: 

The problem of local budgetary control is very 
much more difficult than that of the state budget, because 


ee 


atetiam seedt revo’ easy ysm-ow bas ,sogbud ett beovbortat 
. oted 
yYidteaog binow tegbud ert to po basubeesint sat * 
“gatten to omis bns tonnsm elt at aegnano omoe etstitezsoon 
-bs'8d yltbser bluoo etstism seondd tud ,astvel stata’ ott 
esbioeb osttinmoo motisxtisups siste ont ysboT ~beseut 


anotaese Istxaetd off to sonsvbhbs at eostvsl ststa st mo 


act to ,stotetodt ,sonbvbsS at Sus -,otutslatasl eft to 
“eaya tegbud off tebnU  obsm sd ILiw doidw enottstigotags 
aeivel to mottsatbrooo 1Sa0efo s sd Hlworde bus aso orsitt mos 
Mtod-yrxs9 f[ffw ervesom ono odd sonta ,anottsitqotaqs dns 
““vtsaaeoon a9ivel to aets1 xsi oft bas motsatrqotags ont 
ai Istinseao er tI -astutibnegxs bseoqotq oat toon ‘ot 
to yltnstneqshni obsm 6d stbus sft tsdt smodoa togbud yns 
ef? ,togbud sit teteinimbs bus sisqsiq dotdw astonsan sit 
ytttodtys aid bas ,1S30ttto Isnolsusisenos: s ef. tod thus stste 
to tidus sisfgmoo bas ffyt s tkorreq of bebastxs ad Sisona 
etegbud oft ai détw tfise5 enoifosensit Lis 
iatoabad “feoog 

yisv ef Lotinoo yistegbud Lsool to moefdorg sat 

seusood ,togbud otste sit to tsdt nad $ivoltt£o ‘stom down 


100. 


of the large number of local’ districts having legal author- 
ity to levy taxes and spend money, and because of the wide 
diversity of activities and functions which these districts 
carry on. 
There are various preliminary reforms in local 
finances which are very desirable if a proper control is 
to be established over these finances, Among the more 
important of these are a uniform fiscal year, a uniform 
system of accounting for all local districts, and a recon- 
struction and consolidation of such districts wherever pos- 
sible. These steps will simplify the task of budget super- 
vision greatly, but it will remain a very difficult task. 
There are two alternatives for the establishment 
of supervision over local budget making. One is to pro- 
vide for local supervision of all budgets, taking the county 
as the unit, aad the other is to give the proposed state 
tax commission this authority. Under the former plan an 
ex officio budget commission could be set up, composed either 
of the county commissioners, of a locally chosen budget con- 
mission for the county, or of a group of local officials 
such as the chairman of the board of county commissioners, 


the mayor of the largest city in the county, and the president 


.O0L 


etonius Isgel gnived stoiitets Isool to tedmun egtst oft to 
ebiw oft to sausoed bas ,ysnom bueqe bas eexst yvel ot yi 
esointtetbh seed? dotdw anoitonut bho ‘en24 fr ithe to ysiterevtb 
20 yrise 

Isoof nat ango%e7 visnimitsig evolisy 9ts orod? 
at Lottaoo tsgotqg s ti oldsiiesd yrev sis dolidw nécuaels 
stom edt goomA -sonsatt seoit t9vo bedatidetes ed of 
mtotiay 8 (TS9Y {soait duet ban & 918 sacdt to tnad tog 
“1099 8 pas. SSoizzath Isool Ils tot gattnuooos To mosage 
-800 xovoxecie atotrtealbo ace ts to nottsbtfoasos bas nottourie 
-t9que sogbud to wast ont yittaate. ILiw ag geontT oldie 
gtast sIvolttT th YIsv s aismet ILtw ti tud teers noLaiv 

tnemleitidstes odd tot esvissniesis owt sis orodT 
-org of af 90 gn iasm tonbud {fsoo0f t9vo nofeivreque to 
ytnwoo oft gainss “ apiaband ifs to moteivisqua IsooL tot ebiv 
otste beaoqotg oat py ta of af teas o ont Das tins emit 2s 
os neta Tonio ord zeba¥ of fh oat ue aid? nokea tiuo9 xat 
sedi te be sogmos vals Sea od bivoo noteaimuoo togbud obottto x9 
-moo te3g5ud neaosio eliasos 8 to saxono ae imtoo wsnus09 ont ro 
efstottto ae to qvorts s to Io .xteuz09 oft tot cit endin 
e2tomofaeinmos ytnvoo to bisod ot to aanrttscdo ‘ostd as dove 


Snebtestq oft bas ,ytmvoo oft ak ysto sasgtal od to toysem oct 


101. 


of the most populous school district in the county. 

Such a budget commission could pass upon the budgets of all 
local spending districts, but it would be necessary to de- 
fine and limit its power carefully in order to avoid local 
opposition to the whole plan. It would be wise, ne doubt, 
to provide, under proper conditions, an appeal from the 

local budget commission to the proposed state tax commission, 
whose findings should be final. 

The other plan whereby all local budgets would 
be sent directly to the state tax commission for approval, 
would increase tremendously the burden upon this body, but 
it would have the merit of providing the means of a compar- 
ative study of expenditures in different districts for dif- 
ferent purposes, and of a more intelligent supervision of 
these outlays over the state. The latter result could 
perhaps be accomplished if the commission were given ade- 
quate supervision and control over the work of the local 
budget commissions, together with the right to entertain 
appeals from the rulings of the latter. 

The subject of local budgetary control is so 
vast and so difficult that it will require many years of 


experience for its full realization. No state has at present 


LOL 


ds eytnyoo sat at soirtetb; Looros. ayolugog, ¢eom oft to 
ffs to atenbud edt mogws aesg bilyoo moteeinmoo gogbud s dove 
“ob of ytseagoon od bluow si sud. ,atotrsath anibnegs Isool 
fso0l bkovs of tobto at yliutetso tewog ett timtl bas eatt 
etduob om ,saiw od bivow dI... .nslg sLlosdw, snd. od noitieogqo 
edd mott LIseqqs ns ,aenottibnoo tsqgotq tobun ,ebivotg ot 
tofaatmmoo xsd etste beeogotg eit ot motaginmos teghud Lsool 
efenit od, blyoda agnibatt se2onw 

biuew etesbud Lsool {fs .yderodw asiq. todto oAT 
.«fsvorggs tot. sofLeaatmmoo xsi sista ond oc yltoorld tase od 
gud. ,ybod sins aequ nsbitwi ont ylevobnsmett sasotont bilyow 
-tsqmoo s to ensem ont anibivorqg to sizom ond. oved Oluow sf 
“tib. tot atointeib tnotetttdo ai esrutibnegxs,to,youtea ovits 
to motetviequa tnogtifetnt erom s To bis ,agsociwg-sn979% 
biuoo siuact tetits£L oT  .otste .odt tovo ayslivo oeaesodd 
-9bs nevig etew aoleatimmoo odt ti bodaficqnooos od eqsdtec 
{sool odt to Atow odt tovo Lottaoo bas molaivisqua sestsayp 
aistitotas.ot tdgit edd dtiw tedtogod ..enoizetmmoo toegbud 
etettsl ont to. agatigsnt odd mort. elsoqgs 

oa at Lottmoo yistepzbud L[so0l to toegdue oAT 
te.arsey yasm otiupor [Liw vt dsdt dt fwoftiths oe bus tasv 


tns2eo%q ts asd otste of. .motsasifser [Lut ett tot sonetuoqxs 


102. 


a satisfactory method of dealing with the problem, It is 
very essential that local public opinion be actively en- 
listed in support of any plan that may be underteken, and 
we recommend as a beginning the introduction of the prelim- 
inary means which we have outlined, such as the uniform 
fiscal year, the uniform system of accounting to be pre- 
scribed by the proposed state tax commission, or the depart- 
ment of efficiency, and the consolidation of local districts 
wherever possible. These steps will produce economies 
in local expenditures which will make the introduction of 
more effective budgetary control easier, and the results 
more lasting and satisfactory. 
2. THE TAXATION OF 

MOTOR VEHICLES; 

The subject of motor vehicle taxation hes come 
very rapidly into prominence with the growth in the number 
of such vehicles in general use throughout the state. 

There ere three aspects from which the problem must be 
viewed... The first is the taxation of the automobile as 
personal property; the second is the license tax on the 
privilege of driving a motor vehicle over the public high- 


ways; and the third is the use of the motor vehicle on the 


SOL 


(at #1  ,aeldorg odd itiw gatised to borltem yrotostatisa « 
| ~ri9 (Levitos ed mofmigqo olff{duq LIsool tacts fslinsaas YIev 
brs aes tre brs od yem tsdt nasigq yas to srogaue at petetl 
emitoerq sit te moktouborini edt aninniagsd s eas bnommooet ow 
| mroting acl? as slove  boatttyo eved ow dotsw as on vaent 
Pen ed ot sntdtnsro90s to meteya mot Ens odt ,.%s9v tsoeks 
etisqob ont to ,goteetnmoo xst state peougeag edt yd naaaene 
atotrtath Isool to motisbiLfoanoo odt bas ytoueLortte To trom 
agimonoos soubotq IIiiw aqote s20nT — eldiasog toveronw 

to watdsubedsat edt exsm Iftw flo fstw estus Lhbneqxs fsool mt 
ativasi ent bas ,tsless Lotsinoo yistegbud svitostis 9tom 


eYtotostefitisea bas gaivast OT OM 


TG WOLTTAXAT’ GHT oS 
: Seto Dae HOTOM 


emoo asm toitsxst efoidev tosvom to sosfdua ox 
rocoussr out at dAtworty edt dtiw sonentmorg otat eibiqex ytev 
atare sat tuodguotds sey Istensg at asfotiey tloye to 
ed teu meidotgqg edt doidw mort atosqes sermds ous etTedT 
as ofidomotus ordt To noitsxst oft at garft edT sbowety 
edt 110 xsd sansotl edt at bnooes oft ;ytueqotq Isnoeted 
-fgid ofiduq sat tovo efotiiev todos 8 gmivith to egeliviag 


eit mo eLloidev totom oft To sau edt at brtds oft bas says 


103. 


highways in the transportation of persons and freight for 
hires 4, 

Taxation of Automobiles as Personal Property: 

The state constitution requires the taxation, 
according to value, of all property other than thet the 
exemption of which is constitutionally authorized. It 
is necessary, therefore, to continue the texation of motor 
vehicles as personal property. The automobile being sub- 
ject to universal inspection and always where it can be 
seen, one would suppose there should be no evasion of the 
personal property tax. We have learned in our investigations 
that this is far from the truth. For two reasons at least 
it is possible for a considerable percentage of the auto- 
mobiles in the state to escape taxation altogether. 

First, the fact that all property is required 
by statute to be listed and assessed between the first and 
the fifteenth of March. It is easy for the owner of an 
automobile to secrete it during these few days and the as- 
sessment records indicate that this is a rather common 
practice. We have found also that importers of new cers 
make a practice of taking orders for automobiles in advance 


of the first day of March, but never promise delivery unless 


SOL 


toi dogtett bus atoateg to mottstroqansid oft at ayswilgtd 
| | otksl 
4 | systegoxT IsnoexeG as e@lidomosuA to mottsxsT = = 
? (Noissxet eft esxtypor aottudttenoo ofste oT 
oft tsiit edd tonto ydisqorg LIfs to ,eulsvy of antbrooos 
$I .bosttodeis YLlsnolttuttienos af Motdw to nottgmaxe 
totom to motésxst edt eyntinoo of ,ototetedd .yrseesoen et 
‘Lde gated alidomotus on?  .yeteqotg Lbnoetaq aa dotstter 
od ms $i otorw evsawis bas noitdoogqent Leatoviny ot to9t 
edd to notasve om ed bluotfa ovodt saoqgue Hbiyow eno ,ne9e8 
anotdsgiteovnt tuo nt hentssf evant oW  .xet ytreqota Isnoctod 
gasel ts anoaset owt tof .dtcd ond ator <st ef aint tstt 
~osus oft to systinosorsg ofdsisblenoo s tot eldieaog,at tk 
.todtegotis nottsxst eqesose ot peabe-au-Ad aslidon 
bettupst ak ysteqota [is tstt gost sdt text | 
bis taxtt off neswied beaesees bis botatl od of ssutate yd 
ms TO tohwo odd tot Yass ei #1 idowall to Ménssstlt ond 
was oft brs eysb wet seodt antrub tt otstoea of ofidomotua 
mommoS teittst & af eind tant etsotbnt abrosex shemecoa 
Biso wet to atetrogmt ted¢ oeLs bnvot evad eW .sottosxg 
sonsvbe at asltdomodus tot atobto antiet to soisosiq 8 sian 


aaolns yrevilod satmotq tavea sud ,doxsll to ysb setit eft to 


104, 


they happen to have the cars on the floor or know that they 
can be delivered directly to the individual without sub- 
jecting the firm to the tax. This means that the great 
bulk of the new automobiles coming into the state arrive 
here subsequent to the first day of March. Naturally 

a car purchased after that date does not pay any personal 
property tax. 

Second, as the lew has stood for many years, the 
exemption of $300 to the head of a household has not been 
confined to household goods. We have recommended herein 
thet this be changed and that the exemption be declared to 
be upon personal property consisting of household goods 
and personal apparel. At present this provision is the 
means of exempting a large number of eutomobiles, since 
those persons who own no household goods may use the $300 
exemption for the purpose of exempting their automobiles. 
In 1921 the average assessed value of automobiles and auto 
trucks was only $276.48. We believe that this is a sit- 
vation which was not contemplated by the legislature in 
enacting the personal property exemption. We are satisfied 
that there was never any intention to protect by a tax ex- 


emption an instrument of commercial use such as the automobile. 


AOL 


yond dsdt won to toolt odd mo atso ont avad of ne qqect yout 
«dye syotitw Isubivibnt ols ot yiItoorth beteviles od 169 
tse%3 ont jectd eneom ett? xed ont of mri? ont gnisos;, 
evitts etsta edt ofnt gnimoo aslidomotus wen edd to afud 
‘Uterus wdotel to yeb tatit odd ‘of tneupoedua otort 
Ishoeted was ysq tom 3905 stsb tsds totts boasdowig 189 8 
ixs? wrsqorg 

‘eas 1 2TSSY yasm tot boote asi wel eat as eDM0092 
need tor asl bLosoavod s to beod ont of 00&8 to nottamoxe 
mtoted bebaemmooer svad oW .2boo0g Blodeaad of boattaes 
shan bow Losb od noitsqmexe eit tedt bas bepranto od eidt todd 
| 8boos ‘blodoavort to anisatancs wausqotq Isnoaeteq moqu sd 
‘eit at nofaivota efdt insaong SA efotsaqqs Isnoateq brs 
sonia ,aeslidomotus to tedmua agial 8 gattquexe 10 ansem 
0088 edt say yon aboos bloeauarl om nwo offw emoateg seont 
' ,eslidomotus tiedt anticmexe ‘to seogqiug oft tot noisqmexs 
osus bas eeslitdomosus to oulsv Miesatea’ S98T9VS ont reer ar 
“othe s at etdt tend evettod oW «=. 8H LO TSS wire asw exours 
at stutslaigel salt vd betsicasinoo ton esw dolisw moissy 
heltelisa ois oW - woidgmexs uiteqorg Isnoersq ont” anttosme 
exo xsi s yd tootorg of noténotat Wis teven asw oredd tent 


.9lidomostus oct as dove sau Istotenmod to twomettent as moticms 


105. 


We believe further that the surest and safest way to tax 
automobiles effectively is to collect the license fee and 
the personal property tax at the same time. This can be 
done without changing our constitution since it involves 
only the manner of collecting the tax and does not affect 
the uniformity of the tax. 

The contention is advanced by some interests that 
the automobile is now paying more than its share of the 
taxes. With restriction of the personal property exemption 
and the establishment of a strong centralized state tax 
commission with power to compel the full and equal assess- 
ment of all property of every nature by the local assessor, 
the tax burden will be equally distributed to all classes 
of property. We are referring here to the taxation of 
property for the support of governmental functions, and 
not to the tax voted by the people or the legislature for 
building highways. It is entirely proper that an additional 
tax should be placed upon an article of personal property 
which is itself the cause or the medium through which the 
highway may be built. The modern permanent, hard-surfaced 
highway hes been largely the result of the demands of the 


col 


xst ot yew testse bas seotue oot tadt rondtist evetiled eV 
bas 99t sensolt ed toeLfLoo of at yLlevisootte aslidomotus 
ed nso eid -onid omse ent ts xsd yirtoqorq Lsnoateq ont 
seviovat tt sonie motiustitenoo tyo gnignsdo tuodtiw emobh 
sootts tom as0b bas xs? ent gnitostfoo to tonnasm ods yino 
.xst oft to ysinxotiny sols 

gedit. atestetat omoa vd beonsvbhs al aoltsnestsioo sdAT 
edt to susie ati nat eotom gniysq won atl elidomotus. odd 
nottiqmexs ytteqotq Isnoateg oft to -nolsofizseaet atiw  .2exst 
xsd ciste bestisrineo gnotta s to stnommfetidstes ont bas 
-cesees Lsups bas [Lut edt Leqmoo oc tewoq Atiw nolaeinmos 
.toaageas Isool edt yd siuytsn vyiovs to ytiteqotg fis to tnom 
eseasio [fs ot betudin¢elh yilsupe ed iftw nebaud xss ot 
to mottsxst edt of oten anitretet o138 .°W eYtteqgotc to 
bos ,anottonvt L[setnemnteveg to ¢rogqua eNt.tot ysteqo1tq 
tot expislaiuel ent to eLgosq ent yd betov xst ods ot ton 
fsnoitttihhs nas tedt teqorqg YLlotkisne af tI, wayswigth anibliud 
wttogotq [smoareg to efotixs ns anata hesieckes ed Hfiyorde xst 
edt doisw cguoms mutbeam sit to sauso sit tloeti ef doistw 
Heostraveshian ,tasasiisg atebom exiT etliud od yem yewdatd 
edt to ebnsmeb ods to tiuact edt yYLegisi aoed esd ysewigia 


106. 


automobile owners. Indeed, without the automobile this 
type of highway would still be regarded as an unwarranted 
extravagance, These roads are in such e peculier degree 
for the use and enjoyment of the autoists as a class, that 
special taxation of these vehicles for highway purposes 

is entirely justifiable, 

We recognize that in another sense the entire 
public benefits from these improved highways, end all 
taxpayers are now meeting the obligation herein implied 
through the payment of the general tax levies for road pur- 
poses. The automobile as a form of personal property should 
contribute to this purpose, and our recommendation for the 
collection of the property tax on motor vehicles is designed 
to insure a better distribution of the property tex to all 
owners of such property. 


License Taxes on Automobiles: 


The case for the taxation of the automobile in 
a special manner in order to provide and maintain the 
type of highway required for modern motor transportation 
has already been stated. We have considered the scale 
of license fees now imposed on automobiles and motor trucks 
ang have decided to make no recommendation looking to a 


modification of these rates. 


-00L 


atds sflidomotus oft tuonditw ,bsebnI  .ersmwo slidomotys 
betnetiswas ns as bobtsge2 od. [itte bilvow ysawigtd to ‘sgqyt 
ee139b tsiluoeq?’s dove alvosts  absot s29dT - SONSBSVSIIXS 
tedd ,eeslo 8 aes atetotus edt to tnomyotne bus sexs ont tot 
eseoctug yswiisid tot eefoidev sesit to noittaxss Istooqa 
seldsitit¢tanuy yloti¢no al 

etitms oft sence todtons at tsdt estagoos1 sW 
{fs bas ,eyswigtd bevorqmt seeds mort a¢gttened stidu¢ 
botiqmt atered mottsaifde edt gnitesm’won sie atoysqxst 
-ty¢. baor tot eesivetl xst Istenss sft to dasaysq sdt avons 
biyode ystteqore {[snoetsq to mrot s es slidomotus exiT ~.aseso0q 
ent tot mnoktsbhbnemmoost tivo bis. ,saoqiug. aids of ssudizsinos 
bengtesb at .xefoidevy totom mo xsi ysireqotq ods: tovnottoslloo 
{fs of xsi yséteqotq odd to molttiudtitetbh rzstted.s savent ot 
«Usitecotq dose to etonwo 

:ealidomosuA no aexeT sensois 

mi sfidomotus sit to molssxss edt tot saso sit: 
edit afsinism bas ebivotq of tebto atetonasm Isiseqe’s 
noijstiocansit: totem mzebom tot» beitinpsit yswisid to eqyd 
efsoe oct betebienoo svsi eV ebstsie nased voestls esi 
atoutt totom bus esiidomotus no besodmi won esst sansotl to 
8 ot gatxool noitsbaemmooet on saxsm ot bebiosbh even bas 


eactst sasdt to notssottibom 


107, 


The Automobile asa Public Utility: 


The. development of any new comunity, territory 
or country depends. on transportation for its present exe 
istence,. its future, and its. continued prosperity. Trans- 
portation is the backbone of all activity; without it prog- 
ress must. stop. 

When the northwest was first thought of as a 
possible empire, men with brains conceived the plan of 
building cross-continental railroads into the heart of what 
was. then an unknown. country. The project included the 
State of Washington. . The federal government, realizing 
the. necessity for railroad communication and transportation, 
granted both the Northern Pacific and the Southern Pacific 
railroads. vast tracts of land to create a value upon which 
the promoters might erect a financial structure. Capital 
was secured. and.the railroads were built. The great north- 
west came rapidly into possession of its natural. resources 
and soon made itself felt in the Union. 

Automobile transportation began in a small. way, 
Individual owners.of automobiles carried passengers for 
hire, Individual owners of trucks hauled freight by the 
ton over the highways built at public expense, until at 


the present time we are building highways with the general 


TOL 


tysELLIU olfdut s es elidomotuA sgt ' 

ysosiazes .Ysinwmoo wen yus to tnomgqoleveb eT. 
exe tnesetg atl tot moitstaogqensis so ebrogebh yainuoo to 
~eansil,.. .¥tiueqeotg beunttnoo ett bus ,cmtut edt, ,conedet, 
eygotg ti tuodtiw :yivitos IfLs to enodwesd eft ef nottstirog 
oeGote, Teum eaot 

8 @e8& to tdguods taril easw teowritzon oft sori 
to asig oft beviesonoo antsad cttw oom ,.etiqme sldleaog 
tsdw to. duses, oft, ot mi absoxlier Isinenitnoo-aeoto gnibliiud 
_ ott bsbhulont tostorq oT eYitnwoo, sworlny ms nodtesw 
gnisilset, .dnemmrovog Lsisbet oT . .rotgnideasW, to etste 
Molsetrogensis bis motisotnaummoo bsorlist tot ytieeosoor, ori. 
oitioad atadivoc. os bas oltios® mierisroll orld ddod, bodaeta) 
doisw mnogu sulev s etseto ot bust to etostdh tasv, ebsorlier 
fstiqs) .emustovite fstonsnti s gosto tigtm exetomorg sat 
-fittom tsoi1g esT ~aJfiitnd evew ebsoilist. odd, bas,.bestvooe esw 
esotvoesat Isiutsn etki to moteesenog otnk vyibiqss smso. tacow, 
. Moin. edt at t¢Llot, tieetl ebem noose bas 

-ysw tfsme s mk asged noitetiogansid, slid omotuA 
tot atennoeesg beinrtso aelidomodus to atsawo Isubivibnal 
ent, yd tiytoxnt beduert exouns to,etemwo Leubivtbnl .,.erltd 
ts [itnu ,eeneqxe otiduq ts stiind, ayswoiein, oid tevo mod: 


fstenes edt dttw ayswieid gatb{tud sis ew emtt tmeae1rq ont 


108. 


tax money, twelve per cent of which comes from the rail- 
roads as a separate class of property. We are paralleling 
the railroad rights of way with the finest paved roads in 
America. These roads are now being tied up by exclusive 
franchise to bus companies which operate at regular inter- 
vals. between. termini under statutory regulation under what 
is known as the certificate of necessity, found in an act 
entitled "Transportation by Motor Vehicles", being Chapter 
11. of the Laws of 1920-21, at page 338. 

After the certificate of necessity is once secured 
by an automobile transportation company, it cannot be re- 
voked except by action of the state and no other competing 
concern can use that particular highway so long as this 
franchise remains in existence, If the patrons along the 
highway become dissatisfied with the service they make com- 
plaint to the public service commission which in turn grants 
a hearing and determines whether or not the company owning 
the franchise shall operate more equipment, and when the 
order is so issued it shall be. complied with, and in case 
of failure to comply the franchise is annulled. This in- 
cludes the hauling of passengers as well as the hauling 
of freight. 


- 80L 


-lfist srt stort esmoo Mdoftdw to treo teq svioews .yonom xst 
notfol{sisq sm.oW. .ydreqetq to seeslo stestsqes s es ebsot 
at ebsot bevsq teentt ent-dtiw yw to etdgi2 bsorlisy ent 
sviaufoxe yd on bett antod wor ets ebsor seonT SoltomA 
“etetnt teluset! ts etsteqo Motdw eeinsqnstoo and of setsionstt 
“tedw robay-noftslujer Ytotutsie reba Inimtos neewted “eLev 
tos ms mi bnyot .ytbeeooen to etsottisixoo ert es mwordf ‘el 
snotqsdid anted ,"eeloidev totoli yd nottesioganstT"® belsisae 
~865 assq ts ([S-0SCL to ewal srit to IL 

betuose sono ef ytteesoon to etsoltisieo ond rwetTA 
-ot od tonnsd ti ,ymsqmoo nottsttoqanett elidomotus ns Yd 
giiteqmoos tonto om ‘bas otste ott to mottos yd Fqeoxe bexov 
eftrit es unol oe yewtsid telsottis¢ tedt seu nso mteonoo 
‘edt smols anottsg sit YI .eonetetxe mt anitsmer eetdonett 
emoo exten yott eotvise silt Nttw betteltsesth smooed Yewdyin 
etasrs miwe wi dotcw motediumoo soivtea oifdug ort of tuislg¢ 
gninwo ynsaqmoo eds som to redder eentmteteb bas yattser 's 
est nonw bus ,tnengqiups stom stsisqo [fede eetdonsirt ont 
eeso mit bas ,tiw betiques sf Sisde +r bevedt ‘oe er *ebto 
oni etd sbeiivnns ef eeidonett sit yvlqmoo ot otmitet to 
anifvet sit es Ifew es erognesesq to poitiver edt eobulo 
Jtdatett to 


109. 


For the passenger franchise there is paid the 
insignificant sum of $10 for each car having a capacity 
of not more than eight seats; for each seat in excess of 
that number the license fee is increased 50 cents. The 
freight haul automobile pays $10 if that sum is in excess 
of the established wheel base weight license, 

As stated above, the highways of the state are 
built from the public funds and the roads are supposedly 
built for the general use of the public. Under the pres- 
ent system were an individual desirous of buying a truck 
and operating a freight route or a passenger route on 
a highway in this state, the road is closed to him if 
someone has already made application for the franchise, 
This means that the public has already gone so far as prac- 
tically to build and maintain what corresponds to the rail- 
road bed and right of way of a railroad, and it is done in 
part at the expense of the railroad. 

In addition to the loss of traffic by the rail- 
road companies, Washington is losing in taxation thousands 
of dollars each year by reason of the constant reduction 
of value of railroad property. This can be met by the 


imposition of a franchise tax upon the gross earnings of 


-@0L 


‘ent bisq at oredt setdoneit rogneessq ent TOT 
vtiosgqso s atived’ 159 doss tot OL to mwe tnsotttagtant 
to gagoxe mi tsse dose 10% tatece triete nedt oto tom to 
out  adneo 02 hoacetont ef o8% saneotr eft tedmen tart 
‘seeoxe at ef mua tadd tt OLE eysq eLidomotus Lust trigtett 
soandotl tistew easd feedw bedeifdstes oid To 

ets etete ont to eyawisin edt ,evrods betsta eA 
yibeeocyua ots absot oft brs abavt olidug sit mott diiud 
eaetg oft tobnU .obtduq oft to sey Istendg Sod rot sLind 
wourt s shiysd to avotteeh Isubivibat ns sxew mesaye tne 
no etvot teanesesq s ro Stuot tdgiert Bs snitvsisqo bas 
tt mil ot beaofo at bsor ont .etste ett nt yewse tits 
wseisonert off tot nottsotiogs obam ybseris esd onosmoe 
~Ser¢ 8 tet oa Shon ybaotis’ est olldugq edt tedd ensom etAT 
=fteat edt of abhoqsotros tedw aiedntam bus blied ot yfleots 
“ai enob at tf Bue ,bsotltst s to yew to tiyist bre hed bsot 
| .bsorlist odd to oensqxe ont ts ein 

-Lits ont yd ofttett to aaol ent of notdthbs nr 
abisavods moitexst mt guteol ak notanitvesy ,setneqmoo bsot 
nottoubor ¢netenco oft to noeser Yt wesy dose exelfob to 
ent Yo tect of meo SidT  iydieqorc beotfisr to eutsv to 


to apniniss eeots ont moqus xed satdonsit s To roLtkbeogmt 


110. 


auto transportation companies, both freight and passenger, 
as additional compensation for the exclusive privilege of 
using these rights of way. It is. estimated that in 1920, 
@ year when the business was only in its infancy, the bus 
business produced two million dollars of gross revenue. 
A five per cent tax on this volume of earnings would pro- 
duce a revenue of $100,000 annually. 
In this connection the comments made by the 
Colorado Public Utilities Commission in defining "public 
convenience and necessity" as this expression is used in 
the law providing for the grant of motor bus franchises, 
should be noted. It was found that in two counties, in 
which sixty-eight motor trucks were operating as common 
carriers over the public highways, the total paid by these 
vehicles for the use of the roads was $819. The Texas 
and Rio Grande Western Railroad paid $38,023 in these 
counties for highway purposes and other taxes which brought 
the total to $153,896, The Commission said: 
"Public convenience and necessity, by which 

must be understood the convenience and. necessity 

of the people at large as contradistinguished from 

the. convenience and necessity of a very small 

number of persons who seek to derive a profit from 


the £farmers' and home owners! investment.in the 
roads, never contemplated that the truck driver 


~OLL 


~Topmeeesq bas tdalort dtod . 2otrsgmoo nolisitogensit ota 
to egelivitg evievtloxe eit tet nolisenogmos fenolsibbs es 
0SCL ai salt betsmites af tI... .ysw to. atdgit eset antes 
eud.omt ,yonstai avi at yino. esw eeonieud ent nedw Is9y & 
-auneves eeotg to etsilobimotilim owt beouboiq easniand 
-o1g binow egninrss To eawloy eict go xad tm99 oq evil A 
-Vilsvons 000 00L@ To eunsvet s sou 
; edd yd ebsai atnenmmoo et mofttosrnmos eid at ee ee 
ofldugq" gutnitebd ai totes immo eoltii(tsu oliduys gberolod 
ok boeay al noleeetgqxe afdt es "ytlesosoen bas soneinevaoo 
,29eisonstt aud tofom to gnsig oft tot gatbivoty wet ont 
at ,esttavoo owt ai tect bovot saw 21 .beson od Bbiucse 
HOMI0D Bs paitstesgo s19ew aout tosont tdgtoeysxte doisdw 
eeons yd bisq Istot edt  eyswdgid oifdugq ent tevo steizzso 
esxeT ofT . .CL8% ssw absor oct to seu sdé tot eeLoidoy 
eeods ni E80, 88% bieq bsorlish oteteeW ebusid off bas 
trgvoid doidw sexed stedto bas esseogivg yewdgin tot eetinuoo 
:bisa motealtomod sAT 008, édl¢ ot LIstot ott 
doidw yd .ystiesesosr bas soneinevnoo oiltdyd" 
utteesosh Bus sonsinevnos ent hootetshnay sd steun 
mott borletegnitetbsatnoo as eprel ts slqoeq edt to. 
{fame Vtev & To yfier2sosn bas Sonstnsva0d sft” 
moti ¢itota s svizeb ot wooe ow enoatog to zedmuno _ 


eds mt tnomtesvat ‘arstwo smod bas "etomrs? srit 
teviztb xAoutt odt tsar hetsigmetnoo reven ,absor 


lll. 


should destroy that, to the cost of construction 

of which he contributed little or nothing, or 

that he should reap where he had not sown. When 

the taxing laws of this state are so amended that 

the truck driver operating over the state highways 

shall contribute his due proportion to the cost 

of construction and maintenance of our highways, 

then, and only then, can this commission regard 

his use, under proper conditions and restrictions, 

of a great and tremendously expensive public 

facility as of equal dignity and equal benefit 

to the people with the moderate use thereof by 

the ordinary tax payer." 

The state policy of regulating commercial motor 

transportation is not completely developed. At pres- 
ent the board of public works has full jurisdiction only 
over those concerns which have exclusive franchises for 
the use of the roads. The law should be amended to give 
this department complete authority over all concerns and 
individuals who use the public highways for commercial 
purposes, whether an exclusive franchise has been granted 
or not. When this regulative step has been taken, we re- 
commend that a tax of five per cent be imposed upon the gros 
earnings of all persons or concerns engaging in the trans- 
portation over the public highways of passengers or freight 
for hire. In the meantime, the state should collect at 
least enough from those using the highways for commercial 


purposes to cover the administrative cost of this branch 


LLL 


‘nottourdenoo to yi eis ot ,tsit youteoh Tents 

to. gridton ro sLltsiit hetudtatmoo on dotdw to 

menmW .mwoe ton bent of stow qsor biuota on saris 

fadt bebseme o2 ets etste etdd to awal yntxes oft 

ayewipid etste ent tevo anitsieqo tevirh wourts ont 

' teoo eft of mofsitogqotq euybh etd eteodizinoo If{srie 

,ayswigicd tuo to sonsnetaiam bas soitouitenoo to 
“bispet nofeciomoo afft aso ,mendt vino bas .nedt ~ 

.anotiolisest bas anoitibacs teqoig tebme ,senw aid 

- otiduq evienoqxs ylevobnomett bis tasra s to 

titened Isups bos yingtb [supe fo es yeiliost 

yd toorest een otetebom odd atiw efqosq ont oft 

",toyeq xed yisatbto ort 

totom Istotenmoo gntts(ugot to yotlog stste oT 

eat SA -beqofevobh yletelqmea ton ek molisttoqanstt 
vino moisotbattuy ffut asd axtow oi fdug to brsod ont te) 
tot seaidonett oviewloxs veri fio fciw amrsonos seont 19v0 
svig ot bebnems od bivore wel aT peer ent to seu oft 
hus enmteones Ile revo dixie thin esol[gmoo gnomtirsqeh atarit 
Lsfortounioo tot ayewdgid offdugq ons say orw eslsubivibat 
Setnsig mood es selisionstt sviautoxs as tectenw .2920giNg 
-9t ow ,msxsd mosd asl gete evitsiuget eidi nedW. .tonm to 
mots os moc beeogmt sd tnso tesq evit to xat s sant bnemmoo 
-enstt eft ai gninsgne emteonoo to anoetog IIs to egniniss 
todgtexzt to eregnoesesq to eyswigid offduq ont tovo noftetrog 
ts toeffLoo biyoda stcte sclts ,smitnsem ort nT -otts tot 
{sfotommoc tot eyswigin sot antes seodt mort ‘Agivome tesel 


domsid eidd to teoo evitsitcinimbs ont sevoo ot eseoqiue 


112. 


of the department of public works. This cost amounts 

to about $100,000 annually and the yield of the present 
scale of fees is only $20,000 to $25,000 per year, We 
recommend an immediate advance of these fees to a level 

that will make this branch of the department self-sustaining 
and the subsequent introduction of a gross earnings tax 

when the state has assumed full jurisdiction over all who 
use the highways for commercial purposes. 

Highway Tribunal: 

We desire also to call attention to another fea- 
ture of the highway abuse. The auto freight transport- 
ation companies are continually hauling loads in excess of 
the carrying power of the roads. The highways are now 
provided with a police patrol, but in every case of violation 
of the highway laws and regulations the offender is brought 
before a justice of the peace for trial and the punishment 
meted out by these tribunals makes the highway regulation 
a farce. A separate tribunal under the jurisdiction and 
control of the highway department is possible as a means 
of curing this evil. In New Jersey this plan is in 
operation and we are advised that it works successfully. 


The expenses of maintaining this separate court are more 


SLL 


atnuvoms teoo atdT -ettow olfdugq to tnemstisqeb ont To 
tnesexq eit to bieky slid bus’ ylLeunns 000.0018 tucds of 
ew .tssy Teg G00 ,6S¢ ot 000, 08% ene et»esst to sisoe 
fevefl & of Best oc ent to sonsavbs ets tbenml as. basamooet 
eninistese-tiea Inemtisqoh eds: to donstd eins eism [fiw tandd 
xst eguinise eeoty & to nottoubotsal tnexupeedue ss brs 
odw {fs tovo motsotbeixru, [fet bemuees eso oseta ont nesiw 
-aseogiug L[etotemmoo tot ayswigirl ot sen 

:isnudia? ysewhs ik 

-89% terctons od noitimests Ifso ot coals s1xtasb oW 
-troqensit saptetl otuvs eT esauds yswisit elt to sis 
to eesoxe mi absol grifvead yvyifsunatinos sts esinsqmoo nolts 
wor ets eyswigitl sdT  ..ebsor sit to tewoq gniyriso ot 
nottslotv to seso yreve nt tud ,Llotisq eoilog s ntiw bebivotg 
teavord et cobrretto ont enoltsiuget bas awsl yewdais ont To 
tosmdeinwg oft bas Isitt tct ooseq ont To sotiaeu, s stoted 
mottsiuger yewsdeis oft eovem elenudiasi eaesdt yO tivo beten 
bis mots¢otbetus, ent webay Isnudius stsisqse A ~S99IST & 
enesem s es sidieeog el tnemtisqeb yswifgtd edt to Lottaoo 
nit et melq efnXt yoaetet welt nt eLitves eldt gninuo to 
eVYlluteceooue exttow $f tsdt beetvbhs ots sw bans moitsreqo 


stom sis ttvoo sisisgse etnt onintstnisnst to aseneqxe SsXiT 


113. 


than covered by the revenue derived from fines. We recom- 
mend such a system of highway tribunals in this state in 
order to protect the public highways from the abuses now 
prevalent. If properly protected, the present style of 
cement road will last indefinitely, but if the present 
abuses are allowed to continue, these roads will all need 
to be rebuilt in the near future. 
3. REVISION OF CERTAIN 

LICZiNSES AND FERS: 

We have pointed out above that the state and 
counties now collect certain licenses and fees for 
various purposes. We. recomaend the following changes 
in these charges: 

(a) Corporation Filing Pees: 

A flat fee of $25 is now charged for filing the 
articles of incorporation for any corporation which is or- 
ganized in the state. We have found a system of graduated 
filing fees is in very general use among the states, and 
we recomnend the introduction of such a plan for this 
state, with the following schedule of fees: 


Amount of Authorized 


Capital Stock Fee 
Up to $100, 090 $25.00 


$100,000 to $250,900 50.09 
250,000 ™ 500,900 75.00 
500,900 "1,000,000 100.00 


For each additional $100,000 
or fraction thereof 100,90 


vert 


-moost oW -ssntt mort beviteb eunevet ont yd betevoo nsidt 
at otete aidd ai alsnudint yswdeid to mot eye 8 love bros 
won eeands oft mont ayswis ta otiduq elt toesorg ot t9bt0 
to elyte dneseig emt ,betostorg YLisqoid a .tnelsvetg 

tnseetq ont tk sud Yledinttebss desi {fiw bsot tnemeo 
boon IIs [fiw ‘abso seont . 9unts 09 ot bewolls ots ‘poeeuds 


votudut TS 90 oxtt nt tliudoesr ed od 


Seer ca cuetor 
seam CMA SMemOTd 
bas etste ont tart evods suo betntog svat ev 
sot eset bis eesnedtl miatres toslfoo wom asténssoo 
 penneslo aniwollot oft brommooet oW Pre eoqiue avobtav 
| abide ap) eeend at 
299% ontitt soitstogroed (s) 
ext antiit tot begtsdo won at ase to est geft A 
“eto at doisw noitstogtoo uns 0% nottstoqroont to eefottre 
betsuybsts to motaye a bavot oved sW ataie baa at bestnss 
bons ,eetete oft snoms ga {st9nea yrev at et eset petLtt 
atsd tot nelg s dove to mottouborént ost brresimooet ow 
:e9st to efubosndoe arivollot eit atiw Datei 
bestronltus To tnvomA 


997 sote. Istt 
OC.cSe 600 OLE ot - 


00.0¢c 000 ,0&S% ot 000, 00.8, 
00.cY 000,00¢ ™ 0660,0éS 
00,00L 000,000,f" 000,00é 


000, 0OL} Isnotttbbs doss tot 
00.00L Ttoerent moftostt to 


114, 


(b) Corporation Annual License Tax; 


Your committee recommends an increase of the an- 
nual license tax on corporations from $15 to $30 per year, 
This is an annual tax imposed on all corporations for the 
privilege of doing business in the state. Our tax has 
always been much less than that imposed by any otherstate 
in the West, and the privilege of doing business in the 
state under the corporate form is certainly worth $30 per 


year. 


(c) Filing Fees Charged by County Offices: 
Ee Fees Charged by County Auditors:- It has been fif- 


teen years or more since the legislature has made any attempt 
to investigate the filing fees now in force in the auditors! 
offices of this state. These fees were fixed by statute 
at a time when the cost of operating the auditors! offices 
was considerably less than it is today, and in addition to 
this the legislature has from year to year placed upon the 
auditors additional burdens not originally contemplated as 
being part of the duties of the auditor. 

The theory of the fee is that it is a charge for 
a special service to the individual, based upon the cost 
of rendering this service, It is entirely proper that 


the charge made should fully cover the cost of these services, 


FIL 


ixsT oarsott IsunnA motsstogtod (d) 


«ns oft to sasstont ns ebnsnstoost osttimmtos wor 


.T88y Teg O&} of GLY mort anottstogtoo no xet oasoott feur 
et tot enoigstogros Lise no beaocmt xst Isunns as et eter 
esi xst 10  sdéste ont af seentesd gntob to egelfivixg 
etstarento ys yi beeogmt text medt eesl Aoum neod eyswis 
et ai seentaud gntob to egeliving oft buns ,taoW ont ai 
toq 0&$ ctrow yYLnistis0 ef mrot eteroqtoo ont Gobaceiate 
c . ' sI89Y 
:299Ti0 ytauod yd bentsdd soot antiig (9) 
-tit need est tI -:exctibuA vsauod yd bentedd eost if 

tqmedtis yas sham esd etutsleigsl edt conte otom to exsey nest 
‘arotibus oft mi gotol at wom eest anfLit sds édagitesvnt ot 
stutede yo bexti orow eeet seedt .odste etnlt ‘to esoltto 
aeotito ‘arotibus ont antderego to teoo odd mesw omit s fs 
ot mottibbs mt bac .yebot ef ti nedt e€ef Uldetobienos eaw 
edt nogy beosig tssy ot tasy mort asd sintsletsel add efdt 
es betsiqmetnoo Yllsntgito ton anebtsd Isnotsitbbs etod bus 
etotibus sdt to asisubh ont to trsq ‘gnisd 

tot optado sei tk sect at o8t sit to ytosnt edt 
taoo edd foqn boeed _Leubivtbat add ‘ot eotvrse {siosqe s 
stadt sseqotg yfetisnas ef sI ~Sdivise eafnay saititebmet to 


,aecivree sesds to taoo sat tevoo yilet blyote sbsm egisdo oft 


115. 


since the burden must otherwise fall upon the general 
taxpayers. Your committee has discovered that in all of 
the larger counties the office of auditor is not self- 
sustaining, due to the growth in the volume of business and 
the expansion of the functions of these offices, The 
increase in the schedule of fees to a level which will cover 
the cost of the auditors' offices will mean the elimination 
of the levy which must now be made to cover the costs of 
these offices, and will accomplish a saving tothe general 
taxpayer, while it places the burden upon those who make 
the greatest use of these offices, which is where it rightly 
belongs. We recommend, therefore, that all fees charged 
by the county auditors of this state for filing of instru- 
ments, except the fee for issuing marriage licenses, be in- 
creased fifty per cent, but that no change be made in the 
marriage license fee, 

26 Fees Charged by County Clerks;- The situation 
in the offices of the county clerks is practically the 
same as that found in the auditors' offices, The fees 
were fixed years ago and the legislature has continually 
added new duties to the clerk's office until the filing 


fees of the office do not cover the cost of all the duties 


CLL 


Istensy ont moqw [fst eeiwireddo taum mobiud ont eonte 
to Lie nt tedd betevoverd eal sottinmoo tuoY ~.etoyaqxed 
-tiee tom at totibus to eotito ont estinuoo togtel oft 
bre eeenteud to scwLov ofd at dtworg oft of oub wantintsdaue 
~ eft ,eeoltio eseont to emolfonut st To fokensexe oxtt 
sevoo [ltw dothw [evel s ot asset to eluberoe ont at sesotont 
nottenimife oft neem Iftw eeottto terostbus ot to teoo eit 
to ateoo oft tsv0o o¢ sbem od won seum Moidw yvel ect to 
Istenss efit ot grivee s Seticmooos Ifiw bas <egotito sacdt 
exsm oflw geod moqu mebrud oft eoostc si olidw ,t9oyequst 
vyitdaix ti otenw at do tet agottto seont to sexy teotsets ot 
beats gost Ife tsdd ,erdteiedt (bretmoost SW .eanofed 
ewottedi to yatiit rot etste etot to atotibys ytnwoo ont yd 
eat ed ,esemeotl egsittam gniveet tot eet ont tqeoxe .edron 
odd mi obam od qsenee on tsdt tud .tn90° 19q YtITLt beesozo 
ost eensots tnattise 

nottsutie oT ~ rexz9f0 ysnvod yd bentsdd sest .S 
eds yilsotiosrq eat exteLlo ytnvoo ont to esottto ong nt 
eset oT .e90ltto Yatotibus ont mt awot ject es omse 
yffisuntinoo esd siutstatpol oft bas ogs atesy bextt stow 
anittt ont Ittny eottto etiareto eid of aetdub wen bebba 


eettuh ddd Ils to da0o ont tevoo ton ob softto ent to eeet 


116. 


required to be performed by the clerk. The latest demand 
made by the legislature is that of providing for the filing 
of an additional divorce decree which must be followed by 
the final decree. While this would not seem to mean much 
to the majority of counties, yet in King County we find that 
it means very considerable added costs, 

In discussing this matter with the county clerks 
we find that their state organization has already had this 
matter under advisement and they intend to recommend to the 
next legislature a substantial raise in all of the fees of 
the county clerk's office. 

It is not so simple for this committee to recom- 
mend a raise of fees in the clerk's office because of the 
fact that the fees are charged on a different basis from 
that which obtains in the auditor's office, and we shall 
content ourselves with the statement of the county clerks 
that they will ask the legislature to give them at least 
twenty-five to thirty, and perhaps fifty per cent increase 
in substantially all of the filing fees in the clerk's of- 
fice. 


De Mortgage Recording Fee:- We have recommended in 
a previous paragraph of this report that all of the fees 


Olt 


basneh teotel oaT ite Lo eft yd bemtotisg sd ot bertupet 
gailtt exit tot gutbivorq to tsxt ef atwisletsel oats ve sham 
axel bowoLLo2 ed teum doisw Set09h sotovih Lenotttbbs ns to 
foum msom of meee tom bluow aint oLfidy -99T09b fenkt ostt 
tedt batt ow ysaued anak at tsy wesitauos to ystitotsm ont ot 
e2d800 bebbs eldereblanoo Ytew ansemt $2 
axte fo yiasoo ont dd iw totism ates gokteevoe ib al whi | 
aids bed ybsetts asi aoitssinssto etete «lori fast bait sw 
ent of Hronuoost ot buetret yords bus tnemeetvbs tebny astismn 
to eset ont to fle mi eelst {stinstedue s ewtsletgel txen 
. | -9oftto e'xatelo ee ont 
-mooet ot settinmoo eidd tot siqmte oe ton ei SI 
eit to sausced eoftto elirelo ect mi acest to eeist s baom 
moti efleasd tneteitis & mo begtsio ets eset sat tedt tost 
ffeda ew bas ,90ftto e'totibus oxit at entstdo doidw tants 
axteolo yinuoo edt to tasmotsta ont nd tw eevloetso tn930009 
tesel ts medt svig of eiwisleigsl edt des Ifiw yedt ted 
sesetoni sneo tsq yttlt agsdxeg bus ,ystidd ot svit-ysnews 
-to e'xrefo eds at asst gniiit ent to Lis vilsttnstedya ni 
| | ~~ lestt 
mk bhbebnemuoost even eW -;997 antbtoo9f e2nsas toll i 
eest oft to [Ls tent Stoqet eidt To Hqst3ste¢ ayoiveta s 


117. 


of the auditor's office, with the exception of the marriage 
license fee, be raised fifty per cent. The committee 
is of the opinion that an entirely additional tax should 
be levied upon all mortgages recorded, with a view of pro- 
viding an additional source of revenue. Such a tax is 
now in effect in New York, Michigan, Minnesota, and some 
other states, and is producing a considerable revenue. 
The tax is to be paid once, at the time the mortgage is 
recorded. It will not be burdensome since it is not an 
annual levy. 

We therefore recommend that the law providing 
for the fees for recording mortgages be changed, in addi- 
tion to raising the initial fee as now provided by statute, 
so that it will require the auditors to collect fifty cents 
per hundred dollars or major fraction thereof on all mort- 
gages filed for record in excess of $1500. In placing the 
minimum at $1500 it was the desire of the committee to avoid 


the necessity of imposing the tax on the small borrower, 


4... REFORESTATION: 
The subject of reforestation has received the care- 


ful consideration of many of the best conservationists and 


o TSE! 


egsiirsn sds to mottqooxe ent ditw ,soktto s'rotibus edt to 
eettinnios odAT etnso t9¢ YItitebeetst ed ,set sansollt 
bivode xst Isnoittbhbhs yLlortine as tsdt ‘motntqo. srt to at 
-otq to weiv s dtiw ,bebrooce:x eegasétom I[fs mnogu beivel od 
ei xst.s dove soutevet to somos Isnoltitbbhbs as gnibiv 
emoe bas ,stoesnntl ,asgidol ,ltoY wolleak.tostts ak wort 
eosunovet sidstebbemos s gnitoubotq ai bue yeetste asito 
el -epsagitom ons “omits odd ts ,9omo btaq ed ot ef xst oT 
mé tom ak th sonte omoenohrud od ton [fiw tI -bobtoost 
eyvel fsunns 

gubbivotq wel ott tedt bnemoost stotetedt sv 
-tbbs at ,bozusdo sd esgsystom gaihtoosz tot esst ent tot 
.stutste yd bebtvotg won es sot Isttiant oct gotetst of mois 
atnoo ystit tooLlies of etotibuys ont etivpet Ifiw ti seritnoe 
team ffs mo tootends moitositt totem to etefiob betbhaud teg 
eft amiosi¢q al .00GL$ to eagoxe al broocet rot -belit eeges 
btove ot ssttinmoos sit to erfeeb off esw tf 00GL$-te mumtoin 
«tewortod fisua odt mo xst-ont goteogmt to ytteaeoar ot 


“SHOTTATCEOURA 6k 
-91s0 off beviooot esl motsstestotet to too tdue odT y 


bas atetnotisvieanoo tasd srt to ynsem To notistebtanos Lut 


118. 


experts in the world. There are two great problems includ- 
ed in reforestation: One, the perpetuation of natural re- 
sources, and the other the protection of the water supply 

of the country. 

It is an established fact that where reforestation 
is not taken up and properly fostered the land which is fit 
only for reforestation soon becomes a barren waste and in 
addition to being a menace to other property causes a great 
loss of revenue from taxation. Those states which have 
removed their timber resources are now frankly engaged in 
an effort to build up the ground to make it possible for 
young trees to grow. 

In the State of Washington we are fortunately sit- 
uated, We have vast tracts of virgin timber still remain- 
ing, but unless reforestation is undertaken as the merchant- 
able timber is removed the natural growth, without care and 
protection, will be a very inferior crop. Replanting of 
trees is not necessary here. We have learned from the 
experts in this line that if logged-off land is properly 
burned the new crop will more than likely be fir; if it 
is not burned and properly cared for the natural growth will 


be hemlock and spruce. 


~Gff 


-bufont. emeidorq tsexg. ows sits stodT ~bLfrow, oct, ni adtegxs 
~st fewisn to motisutequeg odt,.en0. :moiteteetotei nt be 
Wlaque istew odd to motsostotg edd tosto oft, bos ,ee0tv0e 
. ann - e¥tdauoo sft To 

noitatastetes stedw tedi tost bedetifdstee os ei SI s 
dit ef doisw bast edt beteteaot ylteqotq bas qu mexst ton et 
ni bis stasw metiad s acmoosd mooa solidstastotst tol yino 
ts9%3 8S agaLsO yJIScoTg toto ot sosnem s gnted of motiibbs 
ever sotdw eetsta eaodT ..motisxst mott sumevet to aaol 
ni begegne ¥linsil wom sts asotucaet tedmit tisit bevomer 
tot oLdieeoq tk oxsm ot bavorg.odt qu blind ot trotte as 
sworg of esett gayoy 

-tteiyflojsnaxvsitol sts ow motgninesW to sist2e ont oI. P 
eafemox Ifita zedmit nigtiv to atostt tasvy eved eW . .betss 
-tnsdotem edt as moxstisbay.at molistestotet eaelau tud ,gat 
bas 9189 suodsiw qitwotg Isiuisn edt bevomer at tedmit ofds 
to gnitasiged. ..qoto toiueial ytey s od [fiw olsoes org 
eat mort bontsel eves oW .etod yiseesoen tom at eosit 
ylitsqotg ef basil tto-begz0l tf sandt ontl eldt at etteqxs 
dt ti sit od YLexil mest orom LLtw qots wer eft bontud 
LLiw idwors Letudan ent tot berso ylteqorc bas bontud tom at 


.soutge bas xXoolmern od 


119. 


The treatment of the vast and increasing acreage 
of logged-off lands is a problem, The first step in a 
reforestation program was taken by a legislative act of 
1915. Chapter 47, Laws of 1915 contains the following 
provision: 

“When the merchantable timber has been sold 

and actually removed from any land, the board 

of state land comnissioners may classify the land 
or such portion thereof as may be found most suit- 
able for reforestation, which may by order of the 
board be reserved from any future sale, and when 
once so reserved shall not thereafter be subject 

to sale or other disposition, The commissioner 

of public lands shall certify to the state fire 
warden and forester all reservations so made and 
thereupon it shall be the duty of the state fire warden 
and forester to protect .such land and the remaining 
timber from fire, and to reforest the same." 

No suitable approproation has been made by the 
legislature for a proper classification of the lands now 
belonging to the state for the purpose of setting them 
aside as reforestation areas, In our opinion it is the 
duty of the legislature to provide immediately for this 
Classification of all state lands, and the act of 1915 
should be further amended by the incorporation of a pro- 
vision prohibiting the sale by the state of any land that 
is suitable only for reforestation and including the right 
of the state to lease the lands so held for reforestation 
for grazing purposes so long as their use as grazing lands 


will not interfere with the growth of the young trees, 


CLL, 


egso10s guiesetont bis tasv odt to duomsssts ont 
e.mat geta sextt, off meldorg 5 et ebnel 1to-boazol to 
to tos oevitsfaigel s yd moust esw mstg0%g nolistestotet 
gotwolfoi ons antstnoo é¢f@f to awed .h totgeho  .clel 
v _ :moleivorg 
bLlos ised esd tedmis s{dstusdotom oct nosy" 
bxsod ent .bustl yre mort bsvoner ylisutos bias 
hast ons viteasto ysor execofeatnomoo bast etstea to 
-tiye teom bnuyot od yer as tostendt motssoq dove to | 
ons to wabto yd ysm Noidw ,nolisteszotez rot olds 
netw bes (else stutut yas mort beviseset od birsod 
tootdye sd astiseteds ton Ifcste bsvtesast oa sono 
‘aenotaatnmoo oT “~.nortteogqetbh rorito to eIsa ot 
erftt stste oft of YItti1e°o Ifsese ebusl oliduq To 
“bas obsm oa anctteviseet Ife reteotot base mebtsw 
mebtsw srtt stste, ois to ysub oft od Iisa ti moguetods 
grintsmer oft Bas bust dova toetorq of tetestot brs 
".omee oft tJestots1 oc Suns ,ortt mort xrodmit 
edt yd ebem msed esi solitsotgoiggs sldstive off 
Won eboast sdt to nolssolttiaes{[o tsqotc s tot stutsletgel 
mott guistee to seoqiue ort rot etste odd ot gnignofed 
oft at ti aointgo tu0 al eesots Nolistastote1 es sblies 
eins tot ylotetbooumt obivotg ot siutslaigel edt to ysub 
éLCr to tos ont bas ,abmsl otsta [fs to moissotifeaslo 
-otc s to mottstogtoont edd yd bebroms usdtiut od biuorle 
tsd3 boast yous to siste ons yd efse oft gnttiididorg sotety 
tdett edt gaotbutont bans molitstestotset tot yiso eldstiue ai 
motistastotet stot blo oa ebasI ont sasol oF stsie oft To 
ebnsf goissin es gay awfedt as gmofl oa aeseogisg anissiy tot 


eassts gnyoy st to Atworg oft diftw sistretni ton Iffw 


120, 


The state should also be given power to purchase 
at a nominal consideration all strictly reforestation lands 
now held by private individuals not desiring to enter into 
a reforestation contract with the state on their own behalf, 
and a suitable fund should be set aside by the legislature 
to be used in acquiring all such lands. 

The act should also provide that at the time the 
timber on the reforested lands becomes merchantable it shall 
be sold, fifty per cent of the sale price to be placed in 
the permanent school fund and the remaining fifty per cent 
to be returned to the counties in which the land is situated 
to reimburse the counties for the loss of taxes upon the 
said lands. 

The foregoing pertains to the handling of the 
present state lands and the acquiring of further lands 
by the state. There is still another field of reforest- 
ation that must be considered, namely, the right of the 
private individual to enter his privately owned logged-off 
reforestation lands in the reforestation class, and an act 
should be passed authorizing the owner of loggedeoff lands 
suitable for reforestation to have the same classified by 


the state land commissioner and after classification to 


OSL 


Ae, ot tewog moevig sd oe is biveds adeds ont 

ebnal noisesestotey Yisolrzte ifs moitsreblarnoo Esatmor: 8 ta 
otal todas ot guitiesb ton efsubivibat steving vd. bled won 
.tieded mwo tient no stste ond dtiw tostsinoo nobisdeototet 8 
eivssiaetgef[ edt yd obias toa od biwode bau? elist tue ia boas 
| ‘,ebnael Hove ffs anitingos af: peer od of 

eat” omét oitt es tas SRS Tore oels Biuore tos off ~ 
fisde tf* oidetnestoren dsadyed ebast bosaototet ous 10 Godat 
ni bessla od of obtee efse 9 cig to tneo 19g “ete bios od 
nso t9q YITET aninismet si” pad ptt téettoe tasnemisq sit 
betsutta ef bust oft otsn nt eettnios ont et! baintuset’ od ot 
ont hice! vated to sect od! tot aesiiasoo oad setudates ot 
: , | -ebast bise 

ost to satlbasd ost ot adhabies antoerot ont . 

ebast rend aut to guitivpos eds bas eabasl sifate tneeerrg 
-taetotet to bfett tonsons {fits ef syettT ,etste ond yd 
ett to sdatz ost ,ylemsn »betebtanoa od Feu tsdt iohds 
Tro-boggol benwo yloseviitg sid tesns of Isubtvibsl stevitg 
tos is bis ,sesf[o aolistasioist oat of abast toitssestotes 
ebist Tio-besg0l to rsnwo ont nis isostt ue boeeng od bivode 
acl befiteesto enisa ont eved ot noijstestotes tot oldad tue 


ot noitsottteesfo atcstts bas senotee tnmoo bast stste ott 


121 . 


enter into a contract with the state that in considera- 
tion of having his land so classified he will agree to 
have the land placed upon the tax rolls of the county in 
which it is, at an arbitrary tax value so that each forty 
acre tract will be taxed $5.00 and that the tax so levied 
shall be paid into the state reforestation department 
for the purpose of defraying the expenses of fire protect- 
ion, inspection, supervision and control of these refor- 
estation reservations. The county assessor should not 
be permitted to change the assessment of such lands while 
they remained in the reforestation class. This act should 
also vrovide thet when an individual enters into and execuses 
a written contract with the state: embodying the terms spe- 
cified in the stetute, it shall exist for a period of fifty 
years. 

The act should further provide that at the end 
of each ten year period of the life of the contract the 
tax shall be increased twenty per cent, and that in the 
event that the owner of the land desires to withdraw from 
the contract at any time during the life thereof, he should 
be permitted so to do only upon the recommendation of the 


state land commissioner, and upon a showing at a hearing 


-LSf 


-si19bianos at tat etase edd dtiw tosrtmoo s oft todas 

ot estas ifiw oxt beittcast oe bast efsl gnivad te mott 

nt ytnsoo ont to effort xst odt moquy beostq hast ost sever 
eitot floss g¢scit oe suisv xed ytetsidte a ts vat ti so isiw 
betvel oa xsi ont dans othe 00.6% bexat od ifiw toast e1tos 

: tuomtisqed nolistaszotes otste odt ofat bisq sd [isda 
-~toetoig ott $0 keenogxe ocd gniysrteb to ezoqiuy At tot 
-totor saodd to Loxtmoo hrs nolaiviogua smoiseogant toL 

ton biota toeasass atn09 edt .2noitsvigesx motistas 
elidw ebnsl owe To dnsmaaeans ont egaeio. ot bettimrsg od 
bIvoda tos sist ,aaslo ee a ont af bonismor yer? 
sdagvnce bas otnt etotne faubivibat ns motw tadt sbivors oals 
-9ga amtos odd gniybodme siste ant ditw tosringo nettinqw s 
WITLI To bottesg s rot tetxe ffisde tt ,etutsia dan aE bettto 
coe te + 8ISsy 
bre oft ts tedt ebtvotg tedtist bivode tos est. 
eat tositmoo eft to stilt sdt to botreq tsexV got floss to 

edt at tent bus ,tmeo teg ytmews beasetont ed iiss xed 
mort werbittw of asrtseb basl eft to tenwo oft tent tneve 
biuosta od ,toeteds stil edt gntivb omit yas ts Jos tsn09 ods 
emt to noitsbusnmoost odd mnogu ylno ob of oa bottimiog od 


ganizsen s ts gniwode s noqy bans ,tenofasimmoo bast state 


122. 


held for that specific purpose, that the land can be used 
to better advantage when put to some other commercial use, 
If the application is acted upon favorably by the can- 
missioner the applicant shall at the time of release from 
tle contract pay to the State of Washington for the benefit 
of the county in which the property is located, a sum, as 
taxes, equel to the amount that the land would have been 
taxed in said county had it not been registered in the 
reforestation class. In addition thereto, should there 
be any revenue derived from the young standing timber upon 
the land at the time of cancelling the contract, whether 
as wood, poles, ties or other commercial produce, a sum 
equal to twenty-five per cent thereof shall also be paid 
to the county treasurer. This emount, together with the 
back texes, should be placed in’the general fund of the 
county. 

The act should further provide that at the time 
the timber becomes fifty years of age the land commissioner 
shell appraise the same for taxation purposes and shall 
fix a value thereon sufficient to produce a land tax pro- 


portionate in amount to the tax paid by agricultural land. 


SSL 


beau od aso bast odt sss ,seoquuq ofttoeqe ¢sndt tot blo 
sen Lskbotenumoo rsdto smtoe of tua. nedw egstasvbs rstisd ot 
<nmo sit yd yldstovst ‘mogs botos al mottsotiqgs edd: TI 
mott Saselot to omtt ont ts LLade tusotiqgs sit tomoleaim 
titensd oft tot notgntdesW to stesta ont o¢ ysq tostinoo alt 
as ,iwe s ,botsool at yiaeqotq odd dotdw at yYtngos; edt To 
nesd evan bivow bnel ond tedt tavoms odd ot Isups ,eexat 
ent ak betetatge moed ton tk Sse ytavoo bisa at bexst 
estedt bivwoda .,otetsdd noidtbbhs al saaslo notsstestotet 
mnogu todatd gntbaste gnvoy ont mort bevixr9b sxunevet yas od 
atoftenw {tosirtmoo oft gatifeonso) to emts edd te bast sslt 
me 3 ,eoubotq Lstoteumoo tento to asls ,asfog ,boow as 
bisq ed oefs Ifstle toeremt. tudo toq ovit-yinews) of Isupo 
$d3 Attw redtegos .tnwoms eldit etomasott yiavoo sit ot 
edt to brvt Istemey ont at bsoslg, od bluyoda ,asxst. Aond 
-vasoo 

emit oft te tact ebrvotq roedtiwt biwoda tos oT 
ronoteetmmoo basl SNt ogs to aetsey yItLt aemoved: todmkds ont 
ffede bas ees0qivg mottaxst) tol sme ont) satstqgs ILsele 
-ot¢ xsd babL s soubotg of tnetolitue moetedt onisv s xii 


basil Isiutfuottgs yw bisg xst ext ot Savoms nt otsnoltsiirog 


123. 


It should be provided further that at the time the timber 
is cut the owner thereof shall report monthly the number 
of thousand feet removed therefrom and pay to the state 
reforestation commission the sum of seventy-five cents per 
thousand as an additional tax thereon. The money so paid 
to the state reforestation department shall be divided as 
follows: twenty-five per cent to the public school fund; 
twenty-five per cent to the state reforestation department 
fund; and fifty per cent to the counties in which the 
timber is situated. 

The act should further provide that during the 
course of growth of the reforested lands the state land 
commissioner may permit the owner to remove trees by thin- 
ning and shall require the owner to remove al1 of the de- 
bris caused by the removal of any tree or trees therefron, 
and in the event of the sale by the owner of any trees so 
removed, fifty per cent of the amount received therefrom 
shall be paid to the state reforestation department. 

All moneys received by the reforestation depart- 
ment for taxes during the growth of the forests and from 
the cut should be used first to retire the obligation or- 
iginally created by the establishment of the fund for re- 


forestation purposes. After the retirgament thereof the 


SL 


sodmtt odt emit oft ta tad tedtist bebivotgq.sd biuode t1 
tedaua ont yYiddcom troges LIfsde tooredt tenwo edt suo ak 
sista odt of ysq baa mottoteds bevomet test basavodt to 
teq.atnoo, eviteytnevea to mye ont molacimuoo. noitstastotet 
bisq oa yerom edt, .mostedt asd Isnoitibbs os.as basayodt 
as. bobivib ed [isde tueutisqeh aolistaetotat state sdt ot 
:baut Loodoe olldug.odt of taso.teg eviteyinows. sewollot 
trentisqeb solissestotet otsta ont od tni99 -t9q .ovlteytnoews 
edt doidw nk asitauyoo ods ot tneo i9q yttlt bas, ,dbayt 
‘ -betsusta ai stedmts 

odd gniivh tedt ebtvoig sedsaut biuode tos. odT 
baslotstea oat ebnsl Sotasiote: ont to. diworg .to,satuoo 
-aidt yd esets.svomez ot tomwo sit dimteg ysm tenotastmmos 
-96 ont to [fs evomet ot tonwo ont oxtupet [fede has gain 
mortetsdts ssert zo sett yas to Isvomer oft yd boauso staid 
os 299m% yns to. tanwo.odt yd.elsee, odd. To.taeve,ondt al das 
., tlottetedt boviooes tayoms add.to tase zoq yttit ,beyomes 
stnomfisqebh motistastotetsist2,odt o¢.bisq.ed L[isde 

-tisqoh aottstastoter sAdt.qd beviooes ayonom ILA 
mort bas ataotot ods to dtwotg oft gaiitud sexst tol snom 
~to mottsagtido sit etitet ot tetit bean od biyode tuo odt 
“9% Tot bniyt odt to tnomletidsteae sdt yd betseto yilfsatgt 


edt tostsent snomeaxtter odd testa -e9e0gtug molistastot 


124, 


moneys remaining in the fund should be used to acquire 
other lands by the state reforestation department and for 
the protection thereof. 

We submit these suggestions to indicate what may 
be accomplished to provide for land classification without 
changing our constitution. The subject is of the great- 
est sesertahes for the future prosperity of our state, and 
we urge that steps be taken without further delay to put 
@ proper reforestation program under way. 

5. THE PERSONAL PROPERTY 
EXEMPTION: 

The constitution authorizes the legislature to 
exempt personal property to the amount of $300 for each 
head of a family liable to assessment and taxation. 
Appropriate legislation has been enacted to carry out this 
constitutional exemption, We believe it to have been the 
intention, both of the framers of the constitution and of 
the legislature, to grant to heads of families an untaxed 
allowance of $300 in personal property for the purposes 
of the home, although the law does not specifically restrict 
the exemption to household goods. Your committee is of 


the opinion that it is desirable to restrict this exemption 


St 


etiupos of beau od biuaste bast odt of gntintermet eyon ont 
“ot bas tnemtisqeb sotistacrote etste oft yd abnsl resto 
etostedt nottostorq ont 

ysm tsodwv otsotint ot enoiteogaua seodt diidve oY 
tuosdt iw nofjisoitfersio baisl az0t shiver ot petial Lquooos ai 
-tsetg sdt to ad tos tdyue ont etrokdusizessoo 8 of) entgnasio 
bas .otese tuo to ytitegeotg , stutut ort tot Sones togait ag 
tq ot yeleb tens I0T twodtiw noxwst ed agetea tshkt ogi ow 
-ysw reba metgowq Notsstestoiss teqgotq § 
YTAUIONS TANOeAaS BHT Le 

ot erpsslaigel edt eextrodtus solsuttseros ont 
fioss tot 00&% to HOLS sis ot Ysregotq Isnoeisq Iqmexs 
-tottsxst has tmemeesees of sidsif yLtmst s to bsedl 
atdt tuo yttso ot betosme mood esd notsisietgel stsixrqorqgé 
edt meod evs of tt eveifed oW enoitqmexe LIsnofttusisenoo 
to bas moltusitenoo eft to etomsrt ent to Atod oitassnt 
bexsinu ms.eoifimst to ebser o¢ Insts of ,owtsleigel sat 
esaogisg ots tot ytireqotq Lsnoetsgq ni OO&P to sonswolls 
sgotuseet yifsoflifosge ton e9o0b wel oxt Savordsle .omod et to 
to ef settinmoo r0Y¥ -eboos bLlodeaevodt of. moltgmoxe ori 


nottquexs eidt tofiteet ot oldsttesb ei ti sect motnigo srt 


125. 


to household goods and personal apparel for three reasons: 
First, the restriction of the exemption to heads of famil- 
ies is indicative of the desire on the part of those who 
wrote this provision to limit the benefits of the exemption 
to the goods of the household; second, the expense of col- 
lecting the taxes on small amounts of such property is out 
of all proportion to the amount of revenue returned; and 
third, the exemption privilege is abused by individuals 
living in rented apartments, who use the exemption feature 
to exempt other than household goods, such as automobiles, 
boats and other property. 

To avoid this situation, your committee recom- 
mend, on the assumption that such a change would be con- 
stitutional, that the law be amended so that the statutory 
exemption shall apply only to household goods and personal 
apparel. 

The Exemption of Cemeteries: 

Section 6891 of Pierce's Code, under the head- 
ing of "Exemptions" provides; 


"All lands used exclusively for public bury- 
ing grounds shall be exempt from taxation." 


Section 572 is as follows: 


Any person owning any land exclusive of 
encumbrance of any kind, situated two miles 
outside of the corporate limits of any corpor- 
ate city or town of this state, may have the 
same reserved exclusively for burial and 


est 


samoasst sett tot LJereqqs Isnoeiteseq bas eboos bLlodoervons oft 
-Limet to ebeed of moitqmexe ont Yo nottotiteer ost telt 
ofr seont to tisq ext mo ortech ent to evitsotbat et aet 
motiqmexe ont to atitonsd oft timki oF notetvota ates ot otw 
-Loo to seneqxs ett ,broose ‘blotfoevor eft to aboon est ot 
tuo ef utteqota dove to edavoms TLene mo eexst ent anttoel 
‘Kon :bentuser sunevet to Snivema ent of sottroqoza IIs to 
elsubtvibat yd beaude et égelivixe noltquexs end  butst 
esiutsst motiqmexe ont sen onw atnemtisqs botnet at gnivis 
~eelidomotus as dove ,aboog blodeavod net texto tqmexe ot 
-sydiscotg toads o bas essod 

-noo9t settinmoo twoy ,cottsuytia etdt bkovs oT 
-fio0o ed bisow egnsio 8 owe tends rottamees a ac ,bnem 
vrotutete ent tart of paaneae od wst ont tscdit ,Isnoitutite 
fanostsq bas eboog bLoseasos ot ¢ino vlags Liste ‘aetdapas 
: | | . , .lerscas 
‘res trod amd to nolscmexit ext " 
-bsorl oxtt ‘tobaw 1abod ateotsid to L[e88 noisoee 
:eebivorg "extottqmoxi" to gei 


«ytd oiiduc tot yleviteuloxe boey ebnel [LA" 
",noistsxes, moti, tqmexe od L[isde abmuorg, gut 


sewolfot as afl. SVE moitosa 


to evierfloxe bnsel yas noatowo; moetsg YMA 
esiim owt botsuste ,bain wns to sonsidmwons 
-toqtoo yas to etimil sistoqtoo slit to sbhbietvuo 
efit sve yen ,ststa eindt to mwot to yiio sts 
bos Isinud tot yievieusloxe beviseez smse 


126. 


cemetery purposes by complying with the terms 
of this act, provided that the land so sought 
to be reserved shall not exceed in area one 
acre," 
Section 569 further provides: 
"Burial lots sold by such association shall 
pe for the sole vurpose of interment and shall 
be exempt from taxation, execution, attachment 
or other claim, lien or process whatsoever, if 
used as intended exclusively for burial purposes 
and in no wise with a view to profit." 
It is avparent from the above sections that 
it was the intention of the legislature to exempt only 
areas of one acre from taxation under a cemetery plot, 
and then only in case the property were actually used for 
interment purposes and occupied by the dead, all other 
vacant lots in the cemetery being subject to taxation. 
The intention of the legislature was also that 
all charges made for cemetery lots should be used for 
the care, upkeep and improvement of cemetery grounds and 
that a profit was not contemplated. In the last few years, 
however, cremation has to a considerable extent taken the 
place of land burial and in consequence large sums of 


money are invested in crematories and sepulchers within 


the confines of cemeteries, and the promoters of such 


.OSt 


emust ot dtiw aniylamos vd eeeociug yretemso 
trguoe os basl odte isnt bebivor¢®, tos eind?- To 
oto S9TS at peomre. ton Linge hevvones ed of 
; "lL S8tos . Hi 
sasbhbivexrq tontavt Cde noftosa 

Ifede nottstooeas Sova yd bLoa esol Islaua". 

ifisde bns tnomreint to sacquug ofoa odd tot sd - 

o. g$asarfostis ,nolituosxe ,moitsxss mott tqmexe sd 
ti ,teveoetsdiw eaesootq to mel{ ,misf[o storto to 


eseociue Istisd rot yvisviewioxs bebnetatl es hees 
*.dLtozg of weiv s ait iw eeiw on nt bas 


gant enotioes ¢ evods biped mort tneteqe t) ed $I i. 

‘eine fqmexs os omteLetyel ‘oaid to notsusdat erit as tt 
.tolg wi sanes & tsbau nolisxst nox? Si9S 9f0 16 ensts 
tot bean yifsutos orsw hdc p' ott 9es85 ce: ‘vitro west bie 
“tenito fis. bseb edt xd betquoce bes eeeoqisg tnonrretat 
“ oltexst os footdua a indeed yrsdomeo ent nf ever tnsoey 

tant celts eaw stutsiaftzel sdt to noidnsdnt oat Dee a 
Tot bees ed biuona esol yretonios tot ebsa eogtssio ite 
bas ebnyoty yxrstemeo To gnomevotomr brs qesiqiy 880 ade 
,e1s9y wet teal odd aI _ sbetsiqnesnos ton ew diteve s tent 
et nousd duedxe oldstehtesoo & of esr Mot tener9 ,tevowod 
to enwe spisl cone Mpennoo ak O18 {sianud bast to eosl¢ 


nid tw atenisiuqod bus esitotsneto al betaoval ois -yenon 


Move to eresomotq oft bas jfeskistemeo to @ontinoos orit 


127. 


enterprises are reaping a handsome profit therefrom with- 
out the payment of their just share of the taxes of the 
state. 

We recommend that the legislature pass a law 
requiring the assessor of each county to place the 
property of these associations on the assessment rolls 
at valuations based upon examination of the gross earnings 
and not at the usual vlauation placed uvon cemetery prop- 
erty. We believe that this will produce considerable 
revenue to the state, as the right granted by the cemetery 
to the crematory association is a valuable franchise and 
increases the value of the land upon which the crematory 
is situated from a merely nominal value as a burial ground 
to a first-class business property. 

We recomnend further that legislation be enacted 
which would require the owner of such a crematorium project 
to file an application with the county assesser and to 
pay a license tax based on the number of niches to be sold 


and the prices at which they are sold. 


6. MATURITY OF 
BOND ISSUES: 


After a thorough investigation of this subject 


your committee has learned that there are a great number 


Pay #8 


etiw movtersss tktorg omoebmad s anaigser ete, eseliqiotas 
ent to goxst, exit 0;,sese sayy, atest 3erénoutea ent tho 
mugen o>" 

wel & 28sq etutslaigel edt tect baemmooe ow 
eit soslq oc ‘ydnssoo dose to toeeeaes ont gaitinpe 
allot inomsesees eit. io etoitstoocee esos 20 Ysteqotcd 
eanintss eeots soit to pobtaacouxe mogu beeed- esattnuiey ts 
-qotg yrotemeo mnogu beesiq noltsusiv fevau ont ts ton bas 
eldstebkenco sorboig iftwieist tect .eveiisd oW ~-sysre 
yretemeo ond yd botnstg sodgiiz odt as gotsda odd of sunsvet 
bus seffonsxt: sidsuisv.s el moitsiooees yrotsmeto sat) ot 
ytotsmero ent doidw noqs bust ods to soutsy ont esesetont 
bnuota Isiaud s;as sulsv Isnimon. y{stem s mort hetsudie et 
sytroqotg eesnieud eesloesertt s ot 

betosns sd. setts{sisel tsrt: isdsivi hHbasamoset SW 
sosjorg awliotsemeto s dove to tenwo ect ettupst blyow soldw 
-o¢ Dns teesgeas yinuoo edd atiw noidseoilqgqs as oLllt ot 
bioe sd. ot asdotin to tedmum sat. no) heesd xst, sensoll sys 
»ebLoa ots. yeds gdoidwits essing ont. bas 
HO YTIAUTAM 48 
soueer GHOd ». 

tosjdue eltdt to noitsgiteoval myyotodt s asttaA 


todaun tsetg s ots etent tent bentsel esd ests inmoo toy 


128. 


of bond issues in this state that are being continually 
refunded, and that the public is being led to believe from 
year to year that our different communities are in good 
financial shape when as a matter of fact they are paying 
interest on bonds issued for public purposes such as 
bridges, court houses, etc., that have disappeared from 

the face of the earth and have been replaced by new ones, 
the bonds still remaining a charge on the property of the 
locality; and in addition, new bond issues have been levied 
for the purpose of erecting new buildings or bridges. 

Your committee believes that the only safe and 
sound policy for the state to pursue is to retire the 
bonds when due and not permit refunding. Therefore, we 
recommend that a law be passed making it obligatory upon 
each tax raising unit in the state in the raising of funds 
by bond issues to require the bonds to be retired serially 
and permitting no bond issues to be refunded, The com- 
mittee is aware of the fact that there must be a leeway 
of from one to five years, dependent upon the life of the 
bond issue and the use to which the money is to be put, 
before the retirement should commence, since in many in- 


stances from one to two years elapse before the money raised 


.8SL 


ylisuntinoo anied.ets tsit otste eldt ot sevest baod to 
mott eveifed ot bel atied ef ofiduaq ont tent bas ,.bebnutes 
boog ni ots aoitinummos tnorettib two text isoy of isey 
gaiysq sts yordt tost to isttam s as medw.eqede Iefonerit 
as dove aseogiug olfdugq tot beweal ebnod no gestetnt 
mort boxseqqseth even dsdi....ote.,aeevod tivoo, ,eeghiad 
~aono won yd beoslgex sesd oved bas dtises oft to sost out 
odd to. ysteqotg oft mo sgisdo.s gointesmet [Lite ebnod edt 
betvel meed oven esuesiubnod won ,mottibbs ai bas, ;ysitsool 
..eeegbiid to aguibliud wen antisoore, to seeqtuc. sot. tot 
bos stea ylno oft tant aseveifed ssiiinmoo imv0Y 
eft otiterx, of ef svuatuq .ot otsta orld tot yotflog bayoa 
ew ,9toterodT egribnutet timieq gon bus oub asdw ebrod 
mogquy yrotsgiido ti gatdem boeesq od wel s ted basmmosst 
ebsaut. to gateter edt ni ststea ont oi tiny gntetst xsi dose 
yilsites betitet od ot ebmod.edkt etivpot ot soweat bnod yd 
-moo oT ehebuutest ed ot eoveat bnod om gatitimiregq bas 
ysweel sed seum otodt tent tost edt to, stsws et sotiim 
eft to etifl ent noqu tusbausgqeb :,ers9y, svit.ot omo.mott to 
etug od ot ef Yonom ont cdoidw o¢ sau oft bos ewael haod 
-ni yasm ni oomtea ,sonemiioo bhLyode tnomosttex ont etoted 


bselst yonom oft etoted eecqsis atsoy owt ot Smo, mort esonste 


129, 


by the bond issue can reasonably be used for the purpose 
for which it is raised and that it is not good business 
policy to commence retiring bonds before the proceeds 
of the bond issue have been spent, 

We suggest further that this legislation should 
deal with the relation of the maturity of the bond issues 
to the life of the improvement provided by such funds. 
It is a sound principle of public, as of private credit, 
that no debt should exceed the life of the asset created 
thereby. It is doubtful if short-lived improvements should 
eved be financed by bond issues, and it is equally doubt- 
ful if any bond issue for a public purpose should have 
a maturity in excess of forty years. Between the limits 
of say five and forty years, the maturity of the debt should 
be adjusted to the life of the improvement, and every bond 
issue should carry the provision for a tax levy sufficient 
to pay interest and retirement charges so as to eliminate 


future necessity of refunding. 


20 TAX ON FUEL OILS: 
‘This subject is perhaps the simplest of all of 
the means of raising taxes which your committee has stud- 


ied. It recommends itself by its simplicity, by the ease 


OSL 


seogrug eft tot hear od yidsmoeser nso suaet brod sit yd 
eeonteud Hboos tom at tf tent bas beater el ti dotodw tot 
‘-abesootaq sit etoted ebriod gnitistox sonemsco ot yotflog 
. «tnege mood oved oveet baod ent to 
biwote noftelatgel etris tends teddint tesggue oW 

esyeet bnod off to yttintism eft to notteie1 offs tiw Iseb 
abr? dove yo bebivord dnemevorqmt edt Yo stip ont ot 
~tiberd sisvir¢!to es ~otidug te elqtonita bawoe #8 abt 
betsst9 f6ec8 oft to stil ont boooxe bluote tdeb on /sanit 
biuode atnstisvetamt bovilettofie th [uttdsob at sr. .ydersdit 
etdyobd yLlisups ak ti bas’ ,eeudcet bnod yd Sedinenlt od teve 
‘evsd blyode sa0ctuq olLiduq 8 tot syeai baod yas Ti Let 
esimtl soft eowSeh  .ateosy ysuot to esooxs al ytkauienes 
biyotle tdeb eit to ysinvssm oft ,atssy Yitol bas svit yseoto 
baod yrove bas “\theasvotqm: oft to stil edd ot botanphs od 
tnsfortttve yell xed 8 10% molatvora odd yYtts9 hbivode sveat 
etantmtie of as oe eegtsédd tromeriset bas s¢eetodnt yeq ot 
eBantbavtet to ysieasoenmvetytut 
ea0. J HO 3 at 

to ffs to teelgmte orld ecsdisg al seotgue aia?’ bel ai 
~bute sent wedbaaas msoy Moidw eexsd gotatist to ansom ods 


ease edt yd .ytioliqmte eti yd tleatt abnommoooxz II bet 


130. 


with which it is collected, and by the lack of friction 
that it causes in the general business conditions of the 
community. In the very earliest stages of your commit- 
tee's meetings it was apparent, to the majority of the 
members that the gasoline tax could very possibly raise 
a considerable amount without doing violence or injustice 
to anybody. It must be borne in mind, of course, that 
a tax on gasoline, as on any other subject of barter and 
sale, must be reasonable, and the tax must not be used 
simply because it is an easy way of raising revenue. 

We have already discussed the problem of modern 
highway construction and maintenance, and we believe that 
it is unncesssary to expound this subject further. Every- 
one recognizes its importance, and the necessity of pro- 
viding an adequate revenue for the purpose of building 
and maintaining the public highways, It is entirely proper 
that a considerable portion of these funds should be de- 
rived from the agencies which have brought on the modern 
highway problem, and we regard the tax on fuel oils as 
an equitable means for the diffusion of this burden. 
Accordingly, we recommend the advance of the existing 
tax on fuel oil for use in internal combustion engines 


to three cents a gallon. 


OSL 


moitoltt to, Aosl. ssid. yd. bas besootfoo at ti dotdw dtiw 
edt to. anotsibnoo. esontaud {sienes, ocd mt asauso ti tsdt 
-stimmoo ts0y to eegate teotiuss. yrov. oft ot o Xs insuamioo 
edt to ytitotsm ent ot tnorsqgs, asw Ji egnitoon, atsed 
ests: yidteeog ytev bivoo, xed ontloass sft tant etodmom 
soiteutai to sonefoiv gniob dyosdtiw, tnyome eldetebLenoo s 
tsdt. poatuyoo to ,batm ai omzod sd saum SI exybodyas of 
buns setisd to toetdua sodto yns mo es ,satfoesg mo xst. & 
beeu od ton teum xst ont bne ,efdsmoesst od, teum ,olse 
.susevet anieisi to ysw yese ns afi si sausood Yicuiie 
ovebom to meldorg oft boeavoeth yoserls ovsd oW 
tsnt. sveifed. ow, bis pappreduipn bas moitoytsannoo yeuils ind 
-YIsva ~wontcut tostdue aids brwoqxe ot yiseesoonmy et ti 
-otg to ytleasoon oft bns ,oconstrogqmt ett eoximgoost ono 
gnibliud to saogrug elt tot euynevet stsupebs os antbiv 
toqotg ylotisne ei #1 . .eyewiaid olfduq ont, aninisinism bas 
~9b od biuote abnut saestt Lo notttog oldsrebianoo s tsdt 
mzsbom oft no srguotd even doidw eaetonegs, oft mort bevis 
as alto feut mo xst ont bisget ow bus ,meidoiq yswogid 
mobi isd to mofawttLb edd Tot encom eldativpe ns 
pattetxe oft to sonsvbs eft bnemmoset ew ,YLantbioo0A 
eonigne motiaudmoo Ismicstat at eau tot Ito Ieut no xst 


.nolis3 s atneo contd of 


131. 


8. REVISION OF INHERITANCE 
TAX RATES: 


The inheritance tax has come to be recognized 
as a productive and permanent feature of the state revenue 
system, This source of revenue was introduced in 1901, 
but throughout its history there has been inadequate 
enforcement and, doubtless, there has been no little evas- 
ion of this tax. We have already recomended. that the 
administration of this tax be restored to the tax commis- 
sion and that more adequate provision be made for the 
supervision of inventories of estates and the appraisal 
thereof for the determination of the tax. 

We recommend further that the amount of tax to 
be levied on estates, and on gifts in contemplation of 
death, be increased,the increase to be effected through 
a change in the size of the distributive shares to which 
the present tax rates are applied. The present brackets 
are; 

Up to $50,000 
$50,000 to $100,900 


$100,000 to $250,000 
Over $250,000 


POWE 


In the case of direct heirs an examption of $10,000 is 
allowed. 


We believe that these brackets are too high and 


»LEL 


GOUATIAGMII TO WOleltvaAn 6 


besingooot od ot omoo asd xst sonettuenni ont 
eunevert otste oft to otutsst tnensmts¢ bis ovitoubotg 8 es 
~L0€L mk heowbotint esw esunevet To eoxvoe eldT ~-  cisvaye 
etsxypebsnt need asi stesd ytoteid ati tuodgucids sud 
-esve SISsEL of meod asd etedt ,aaslidwob dns sSromeototas 
edt tant bebndsmooet ybSsetls even sW- .xet-etdt to mot 
-etmmos xsi odd ot bototast od xst efds to notisrtetatnbs 
efit tot ebsm od molatvorq etsupebs stom Jest bas note 
fsetsrtqcs sft bas eetstes to aseltotasvat to motetvisque 
-xst off Yo nottsninressb oct tot tooxrecit 

ot xst-to tnvoms ont tent tondtiut bnenmooet SW 
to mottslqmetnoo mi ettig no bus estates mo heivel od 
dguotdt betostte od cd oasetont odd, SSesstont od ,ctasb 
dotcw o¢ esrsde svitudiiserb ont to oxte sit mt egneto s 
atexoasid gnsactq oAT .boilgqs ors eete1 xst tnoesiq oslt 
( ets 
000,088 ot gt 
(000, 0018 of 000,08 


000 ase ot 000, OOr 
000,0éS% sev0 


7M 


at 000,0L@ to motiqmsxe as ation tosrtbh to 9eso ost iva 
| | pewolte 
bas Maid oot ots etoxosid seendt tedt evettled sW | 


132. 


that they could be lowered without causing injustice. 

It must be remembered that the tax is levied on the dis- 
tributive share, and that it will be only the occasional 
large estate in which the share going to each heir is in 
excess of $50,000. In consequence the bulk of the estates 
pay only the lowest rates, which are 1%, 3% and 6%, accord- 
ing to the degree of relationship. The yield of the in- 
heritance tax could be materially increased by a lowering 
of the stages at which the progression begins for each 
class of beneficiaries, and we recommend that legislation 
for this purpose be enacted. We do not propose a specific 
schedule, but we are of the opinion that a decided change 
should be made. 


9. EXPENDITURE OF PUBLIC 
FUNDS BY TAXING DISTRICTS: 


It has come to the knowledge of your comnittee 
that the school districts are anticipating one hundred 
per cent return upon the tax levy made each year, when 
experience shows that it is very seldom that more than 
eighty or ninety per cent of the tax is paid during the 


tax year, the remainder going over until the next year. 


eSéL 


soiventai gateuso suostiw berewoL od Besos eds tect 

-etb ont mo beivel et xst edt sent dotediiomer od teum $I 
Isnotesooo oft yfno od [ftw tk tedt bas .otene evisudiat 
mt ef tied dose of antoz Ssisde odt Motdw mt otstes ogisl 
eotsies bdt to Aiud sod sonewpeanoo mI  .000,08% to aeeoxe 
-Btoose ,RO bos RE BL ete Motdw ,eots1 teewol ont Ylmo Ysa 
ext ont to blety off  .cislenot¢sfe1 to ostgeb ont of snk 
gittrswol s yd beesetont YLisitetsn ed bluos xst eonssiredt 
doss tot akined nolaestgorc ent do isiw #8 degste oHs to 
nottslerizel tant broomoost ow bas | eettetottoned to easlo 
otttoeqa s eeoqotc tor ob SW .bstosne sd seoqgmug ett tot 
esieds bebioob & tect motntqo edt to ots ow sud ,elubesoa 
“Jebam ed biivorde 


:aToTATeld ou 2cii 


eastinmon ssroy to Sabefwomd ont of emoo asi $I 


botbayd sno griittegqtoftins ors etotitetbh Loodoe ori sent 
nefw ,issy Moss shsm yvel’ xsd ent moat Lites tnes ISsq 
mascdt stom tent mobilee Y1S¥ ef ti tent ewole sonetieqxe 
eit goitub biseq ai xat oft to Jaso tog ysonin to ytdeis, 


-wsoy txon odt [itny tevo gnicg tebatsmer sit ,isey xsi 


133. 


When a school district or university anticipates 
one hundred per cent and only receives a trifle over eighty 
per cent, naturally the district shows a deficit and has 
to carry outstanding warrants drawing interest. 

We believe that the law should be changed in re- 
gard to school district and university budgets to incor- 
porate the same regulation as is found in Section 6055 
of Pierce's Code, which provides that the county commis- 
sioners shall have no power to create a debt against the 
said funds in excess of 80% of the levy unless there be 
cash in the fund to pay such warrants. An exception 
should be made to care for unforseen catastrophes. 

10. THs TAXATION OF INTANGIBLE 
PROPERTY; 

We have discussed above the impasse which has 
been reached in the taxation of intangible property as 
the result of the act of 1907 and the Supreme Court's 
decision to the effect that credits are not property for 
purposes of taxation. We expressed the view that it would 
have been better had the matter of constitutional revision 
been faced and settled at that time, for there will be, 
after all of these years of exemption, a considerable 


opposition to any proposal to change the status quo. 


~cél 


esisqtoitns ytierevinu to sdoLluisaib Loomdoa s nenlW 
yidgie tevo eftiat s esvieost yino bus inso tsq herbmasd sno 
asi bas tiotteh s ewomdea toiitetb edt ylistwisn ,dneo 190 
_eteotetai gniiweth atnsiisw anibasteivo yriso of 

-9% ai bearers og bLuore wel ot tent ovetied oW 
_-tooat ot ategbuc yiletoving bas tofitaib foomoa ot bieg 
e205 moktosa nt basot ef as moijeiuget omee ont otetog 
-zinmoo ytusoo emt gsdt eshivotg doidw ,.ebod a'sorsid to 
edt venisgs tdsb s apenas ot tswog on sven Lise atencle 
od etold easelau yvel oft to ROS to easoxe at ebnut hise 
nektqeoxs as _ satustiew fiove ysq of bawt oft ai daso 
-sedqoitestso meecatoiny toi siso ot sham sd blyosle 


GIEIOUATUI GTO UOITAXAT GHT CL 
> YTASIOAL 


esc doliw eaesqmk sdt evods beeavoeib: even ow 
as yiteqotq sl{dinnsiat to noltexss ost nt borloser nosed 
e'sryo00 ometqua offs bas VO@L To tos edt te tiuacr sit 
Tot ysteqotg som ste avibsto tent gostie edt ot mofetoob 
bilyow t£ ssdt waty salt beezsiqzo oW -moitsxss To aessogiug 
mnoteiver Isnoisutitanos to tottem eit ber tested need, evsd 
od IfLtw oteds tot ,omit tent ts beliiesa bus beost aesd 
sidsishtenoo s ,nokliqmexs to erssy seerkt to [fs x9tts 


-oup euyistea oft eynsmo ot Iseoqotq yas of mottileoggo 


134. 


The theory upon which the case for some measure 
of taxation of intangible property rests is the principle 
that all persons should contribute to the support of gov- 
ernment in accordance with their ability. In so far as 
all of the citizens of the state own real estate or tangi- 
ble property located within the state, the use of such 
property as the basis of taxation satisfies this principle. 
But if some persons derive their incomes from property 
located outside the state, or from securities, mortgages 
or other rights to property located elsewhere, these 
persons are exempted from any contribution to the cost 
of government in this state quite as much as if they 
owned federal bonds, It is not sufficient to point out 
that this property is being taxed as suchwhere it is lo- 
cated. These taxes go to the support of government in 
the states which are giving protection to this property. 
Such a person owes an obligation to the State of Washington 
while he is a resident here, and the present tax law excepts 
him from this obligation. The same is true, of course, 
if those intangibles rest on property within the state. 

It does not follow from this argument that such 


evidence of property rights should be taxed as heavily 


EL 


etuasom orice tot seso odt doldw moqu yrosnst oAT 
elgtonite oft at ateer ytreqotq eldisnsint to nottsxst to 
-vog to ¢roqque oft of otudtuttoo “bfuode “enoated “Ife ted 
as ist of nl .-titids rledt dtiw sonsbioccs mt tnsmate 
-innss to stssas Isor mwo etete ont “to enesiftio sat ‘To Lfs 
" douse to say ont otete ond nidtiw ASisool Yroqotg oid 
.olgtonttg eidt settetisa nottsxss to efesd ond es “yfroqotg 
ysteqorq mort eecioont thod? Sviteb edoats¢entoe IE Fue 
aeasatiom ,eelstttwose mott to ,stste odd ebieduo bessool 
eeodt \oterweale bstsool ysireqota of atdait 1Sa¥0 x0 
‘teoo edt of motdudixtioo yas mort betqmexds ets Bnoetsg 
yous tk as Mout es etiup stste erat xt s¢memnmrsvoy to 
tuo Sntog of dnetdtttua ton eb #1  abmod Letohet benwo 
-of ei t£ stsrwiioue as bexsd antag. ef Wtegerg eidt Jats 
ni gnemntevey to tioqque odt ot og eoxst scout? - _ sboteo 
Utteqorq eftt of mottostore snivia sts dotdw eotste ont 
notgntdesW to siste ont of notisgiido ns eswo noeted-s dove 
atqeoxe wel wat tneestq Ssxt bos ,Sted tnehblest s at sa silthw 
.8amyod to ,ourt ef emee SdT  nottsgifdo eftdt mort mid 
eotstea ond nin¢giw ytteqotq no taser’ esidiansint seomt ti 

dove tent dnomugts etnt mort welLot som 2506 4 
ylivesd as bexst od bivore atdgtt Yitsqotq Io sonebhbivs 


135. 


as the tangible property located within the state. In 

the first place, regard must be had for the fact that the 
property is paying a tax, and that a second tax as heavy 

as the first would be excessive double taxation. In the 
second place, we must recognize the argument of expediency - 
on account of the ease with which intangibles may be hidden 
from the assessor, it is unwise to impose a tax the only 
effect of which is to produce nothing. 

In recognition of these facts many states have 
introduced what is known as a classified property tax, 
under which intangibles are segregated and taxed at a low 
flat rate. Such a system has the merit of producing far 
more revenue fron intangibles than can be obtained by 
attempting to tax then at high tax rates, while it meets 
the objection that a class of tax exempt citizens is being 
created. Minnesota obtained $1,363,504 in 1920 from a 
3 mill tax on moneys and credits and a mortgage registra- 
tion tax of 50 cents on each $100. 

It is futile to propose such a tax for the State 
of Washington until the present sections in the constitution 
relating to taxation are rewritten. Since the legal view 


in this state is that intangibles are not property, it 


GL 


ol .otste ont nidiiw bessool vsrogorg eLdtgas? edt as 

edt tedt fost eit tot be of teum brsgez ,eosig sett, sal 

yvsert eas st brioo8e s geas bos XSF § getysg af ytreqotg 

edt al | \sottexs? efdsob eviezooxe od biuow terit odt as 

- yonetbegxe to tnomwets, ot Ssimgooex tem ow, gosta broose 

nebbint od Ysitt poldigustat cto Latw cit iw ease orld to tauooos m0 

yino exit ei ee ogmt of oetwny at tr «Toeadaas osif s10%2 

h é antsy on goubortg ot et slolcw to, foests 
eves estate Yass atost geod to Moidingooet ar 

xed yiregord beltieesto £ 8s owort ef dsciw besghottas 

wol s ts boxset bas betsgetgse e1s eeldianstat doitw tebas 

tst gatouborg to gizom exit esd metaye s flove ..etst tslt 

i shel bentatde od aso nedd eetdignssat sort eurevoet 9 Tom 

eteom tf olisw ,e0tst xsd Maid ts sodt xsd of gntiqastis 

gated at anesitio dquexe xst to easlo e tent noitosido sslt 

‘amet OSL mb B08 ,888,1¢ bentetdo stosenmit -betsero 

~s1s atgex Sgsgstos £ bas ediberp bas ayonon fo xsd Ifin ¢ 

_ 00L% Hoss no etuso 0¢ te xst molt 

tate edt pe xst 8 foue seogotd ot ofisut ef tf haya 

mofiusisvenog odd mt enotjoee sns2etq ett Ltinu motentnesW to 

wotv fsgefl ont sonia mets itwet sts sofisxst ot guitsley 


¢£ ,ydteqotgq ton ets esfdignsint tsdt at ststa aidt at 


136, 


would be impossible to tax them even at three mills on 

the dollar. We have therefore made no attempt to cal- 
culate the quantity of intangibles held in the state nor 
to estimate the amount of revenue that would be derived 
from them. We do recommend, however, that when a consti- 
tutional amendment on taxation is proposed, serious con- 
sideration be given to the question of the desirability 

of restoring intangibles to the category of taxable wealth, 
with e view to the introduction of a state-wide flat tex 
at not to exceed three mills on full valuation. 


The State Income Tax: 


The modern state income tax rests upon the same 
principle as that which we outlined above in our discus- 
sion of the classified property tax. In this respect, 
indeed, the classified property tax and the income tax 
are but alternative methods of accomplishing the same re- 
sult. The income tax is gaining in favor in some states, 
however, because it is a more accurate measure of personal 
ability, and also because it makes possible the taxation 
of those classes of persons whose income is derived from 
personal services and personal earnings rather than from 


property. These classes, from the wage earner end the 


edEL 


io aflim certs ts neve modt xst of eldékeaoqmk od bluow 
-j-fa9 of damettis om shsm srotetedt.oved sW -ts{lob .sdt 
toma otssa ont mi Sblod selditanstal to ytiésnasup sdt etelyo 
berited ed bivow-tsadi sunevet to tmvoms. eds, etsmites.ot 
ektenoo.s aolw dsdt ,toevewod .,Saeumo 97 ob SW... .<modtd mort 
-M09 avoites .bseogotq ef nofisxssd ao tnemdaoms Isnotiut 
Oytiitdseriacsh edi to mottesyp odd of gnevig-eod molttstebta 
eitisow oldsxst to ytogetso odd ot ,aolditagnsial gakttoteet to 
xsi Is{lvehbiw-otata © to-moltoubottat edd ot;wotv s diiw 
etoftsuisvy {fut mo aflim ssitdi besoxa.od son ds 

:xeT omoonl eset2 edt 

emse oft moqs atser xsi emoont s¢sta atabom eAT 
-auo3ib Iwo mi svods bsnifiuo ow doidw tedd.as siqtonizg 
ytosgeor etas al xsi ystteqotq bettiaeslo edt to nota 
xst omoonl oct bus xsi yiteqotq bettiaeslo sat ,boobni 
-9% omse oft gaidailamoocos to ebortemsavitsnresis tud 92s 
,80tste,emoa ai-tovst mi gatnisg ab xstoomoont oT «tive 
fsnoztsq to 9tuassm sistveos otom s ai ti. seusood.,sovewonl 
noltsxes ond sf{diaaog aexism tL .oausood oel{s bas ,ysitids 
moti bevited ai smoomt seodw anoatsgq to esaaslo gaalt to 
mott asdt toddst agninise Lfsmoarteq bas asotvise Isnosteg 


edd hbas.tentss eyswuodt mort ,aseeslo sgonT eYttoqotg 


137. 


salaried clerk to the professional man receiving large 
fees, are exempt from all direct. taxation under any system 
of property taxes. 

It is not possible to determine the character 
nor the amounts of the incomes received by the citizens 
of Washington at the present time. The latest published 
statistics from the Federel Bureau of Internal Reveme are 
for the year 1919, The present level of all incomes 
is much lower, end the 1919 figures are therefore quite 
unreliable as reflecting the current, or even the normal 
situation. With these cautions we present herewith the 
distribution of incomes as shown by the personal returns 
made for the calendar year 1919 under the federal income 


tax: 


(over) 


TEL 


egiel yitvisosr mex Lenoleeotorg od} of Wtelo befietse 
modeya yes tobny mottaxsd fostib [fs mott tqmexe ots , 295% 
, ‘ seexsd vtroqotd to 
tofoatsdo odt onminmroteb of oldkeeeq tom et $I 
, anesiiio ods wd pv isant esmoont adt %o atauome edt ‘ton 
bodetiduq tastef eft comtt $asaet¢ ocd $53 notyntifesy to 
ats smovel IsnreinI to users Larepet sid mort eottattats 
~Semoont ffs to Level tnoaetq oa  .@fer Yeey odd tor 
“etiup eroteradd 61s aetugit CLer sit bas ,tewol dou az 
Tamron ed} neve to  fnetwo oft aatfoelter as sideiferay 
ott détworod tnseco1q ow atottuso seeds ddenw -- .xottsutte 
“antutor Lsnoareq oft yd awotla as eesioont to aottudixteth 
“emoont fstosst odd todas @L@L 4eSy tebasfeo etd tot obam 


:Xsd 


(x9¥0) 


138. 


TABLE XIII. 


NUMBER OF RETURNS AND DISTRIBUTION OF 
PURSONAL INCOMB BY SOURCES - 1919. 


Number of Returns: 114,322 
Wages and Salaries $212 ,502,158 
Business 63,654,832 


Partnerships, and Personal 
Service Corporations 16,807,550 


Profits from Sales of Real 
Estate,Stock, Bonds,etc. 7,245,389 


Rents and Royalties 19,927,776 
Interest and Investment 

Income 14,816,559 
Total Income $350, 433,156 
General Deductions 24,946, 296 
Net Income $325, 486,860" 
# 


Excluding $433,873 of interest on government obli- 
gations not wholly exempt from federal tax. 


These figures show that in 1919, $212,502,158, 
or 65.2% of the entire net income of those who reported 
to the federal government, consisted of wages and sal- 
aries. Evidently there does exist in the state a con- 
siderable class of persons who are making no contribution 
to the cost of government under our system of direct 


property taxes. 


865 


S86 ALL santute to todmult 


8aL. 908 ,S1se astisis® bas eegsW 
Sb8 S28 ,58  gaentaua 


Isnoated bas aqidatens18% 
. O8G,708.6L.... samotsistoqrod .»otv1es 


IseH to asls®@ mott avitorl 
@8b ,css,7 -of9,abno0d ,xoote ,ststeil 


are, ee. eL  gettisyof Sas adnon 
tnomfaovnl bas Schecter 

Qcc dfs st ' / omoont - 
Wear, Sh Odes | emoonl LssoT. 
90S ,dS@ AS _, ameitosbed Lstenend 
ong, 988 ages emoonI toll 
¥, 


-ifdo tnommzrsvog no faotestnt to E%8,éESS gntbuloxe”. 
.xst Isiohbet mort gqmexe yilodw ton eanotisa 


.8@L, 80d. SIS$ .@LeL nt ssct wode setwatt oesdt 
betiroget onw seont to smoont tem orisne oft to 88.85 to 
-{sa bus asgew to Setatanoo )jtmomnitevog L[stebst ont ot 
-109 8 otste oft at tatxe esobh sisdt ylinebivitl -29tts 
molinudiicinos om gniusm sits odw emoetsq to easflo si{dsrobte 
sgosettbh to meteye xvo robay tnemmirevog to teoo ot oft 


aoxss YS19Sqot, 


139, 


The distribution of the $325,486,860 by income 
classes is shown below: 
TABLE XIV. 
DISTRIBUTION BY INCOME CLASSES. 


Income Taxable Exempt 

Classes. Number Income Number Exempt 
$1000-2000 44,224 $ 63,870,455 11,082 $17,417,939 
2000-3000 18,625 45,292,820 11,897 27,072,990 
5000-4000 12,015 41,375,033 350 1,206,495 
4000-5000 6,298 21,961,595 87 575,744 
Total 81,160 $178,497,683 23,416 $46,071,168 
$5000-6000 | zB, rl 15,139,064 

6000-7600 1,860 11,921,753 

7000-8000 PP?) 9,005,120 

8000-9000 814 6,860, 409 

9000-10000 596 5, 667 ,258 
Total 7,179 $48,593,604 
Totals: 88,339 $227,091, 287 

Over 

$10,000 2,567 § 52,324,405 

# 


These persons were exempt under the present provis- 
ions of the federal income tax law relating to 
deductions, etc. 


él 


entoont yd 038,48),éS8E3 edt to moltudiataib odT 
“wolsd mwoda et agaaslo 


vv - r . “es ‘ ani me Bd tab aloe 4 


((BHeeATO SMOOUL YE WoITUSIA 

Yo at eldsxsT | smoont 

tomoexc TodmUM  .- -omoonl todawi ‘egeaslo) 
@be,TLa, S16 SS0,ff és,0%6,639 3 ASS ,dS 0008-000 L% 
0€@,S70,9S Tes, f OS8,SeS,2d  E88,8f 0008-0008 
aep,d0s,f 088 850 ,E08 {£3 -8L0,8£ .. 0008-0008 
BAT, ENE f5°. 20 8ee, (ae, TS> 5188.8  » 0008-0008 
S8L, L070, ads aL8,eS 68a, Tesi svsg © 0dLl~L8 | Lator 
| B90, 981,81 10,8. .0003~0008¢ 

éay, 182, £1 O88.L . 0907-0008 

.., O8.£4800,€ ' 908.2 0008-0008 

20d 088.9. BIS 000@-0008 

2,938.6 “gea _ po0ereo00e 
Od , SC, BAS errs LstoT 

ges, fed. WSSe e85,68° "| telstor 

Bob aseyse Fo NaaySoo. : o00yoLe 


* 


-etvorg tnsestq sdt tebay Jqmexs stow anoatog easnT 
ot aottefet wel xst;omoont {[stobst edt to anol 
.o39 ,amottoubed 


140, 


Two things stand out in this analysis; First, 
the large number of persons reporting who had an income 
below $5000, There were in all 104,576 such persons, 
and their total income was $224,568,851, or 69% of the 
total income. But 23,416 of these persons were exempted 
from the federal tax by reason of the personal credits, 
interest on debts and other allowable deductions, the to- 
tel amount of income so exempted being $46,071,168. The 
second significant fact revealed by the table is the large 
proportion of the total number of those reporting in 1919 
who had incomes of $10,000 or less. We find thet there 
were 111,755 such persons, or 97.8% of the total number 
who filed returns, and that they reported $273,162,455 of 
income, or 83.9% of the total income. Washington is 
below the average of the country in this respect, for only 
71.01% of the incomes throughout the United States were 
below $10,000 and only 56.14% below $5000 as compared with 
83.9% and 69% respectively for this state. Further, 
we find that in the country at large, 47.94% of the in- 
come was derived from wages and salaries, as against 65.2% 
here. 

It is evident from this survey that the bulk of 


the incomes in Washington are relatively small in amount, 


tatit s:afeyfsns aids at #¥0 baata agnidt owT 
emoont as bsd axe guittogst anoeisq to todmustt sgisl ods 
,anoateg dove 8V@,hOL Ifs nt stew steHit .00088 wolod 
eit to Ree zo ,[38, 94 S8S$ asw emo ont Istot atedt bas 
Setqmexs stow enoateg gaorlt to afh, és ‘tue -omoont Istot 
sattbexo Lstoesoq ont to moaset Yd xsd Istobet oid “nto? 
~ot oxlt vemottoubob eldswolls tosito bas aiden 10 taote¢nt 
oT 80, LTO ,dag cntked bot qmexe oa smoont to ¢nuoms Let 
egtal edt ei oldst oft yd ba taoves tost tnsottiqgie bi9098e 
eres mi anittoqet saont to redmu fstoz eat to Sot tteqord 
erods test batt oW eaael to 000,0L% to eemoont bec ontw 
~todaurer Istoz sit to RE. Ve ro .anoered Nowa” aay LIL Sisw 
to Gdh,SdL,ETS% bettoqet yeds isds bas antutet boftt ontw 
at modgnidesW .emoont Istot odd to 2.88 to ,omoont 
Ylno tot ,tooqeet aids ak yvitnuoo eft to egstevs edt woled 
atow eeted® botinU ond ‘tuosguordt aomoont odt to Rro.r8 
dtiw betsqmoo es 00084 wored PAITSe eine bis 000,018 wolsd 
Tonsil  .otsta sist rot yLovisooqact RCO bus R2,68 
ef odt to RSC.NS ,oprsl ts yixtavoo say at tscdt butt ow 
RS.é5 tanisgs as ,aetisise bus asasw mott beviteb asw somos 
lve . stout 

to ALud ont tedt ysvive aids mort tmebive ef +I 


~tnuoms at I[lsme yLoevitslort sts notunidesW nt esmoont ont 


141. 


and. ere composed in an unusual degree of wages, salaries, 
am other returns from personal efforts end services. 

These proportions would doubtless be even greater today 
than in 1919, whichwas the peak year of incomes in the 
United States. These facts are of great significance in 
eny decision to resort to the income tax for state purposes, 
for two reasons; 

First, since the bulk of incomes are small in 
emount and consist largely of wages and salaries, the rates 
must be low. 

Second, since incomes are small and the number 
of persons reporting is large, the cost of administration 
would probably be relatively high. 

A similar analysis of the date from Wisconsin 
shows that 56.4% of the net income returned by the citizens 
of that state in 1919 consisted of wages and salaries. 

The incomes below $5000 comprised 62.5% of the total and 
all: those below $10,000, 81% of the total. The average 
of Wisconisn taxable incomes below $10,000 was $2,945, and 
the similar average in Washington was $2,570. The con- 
ditions in Wsiconsin, as shown by the distribution of 
incomes, are therefore somewhat more favorable for the 


use of the income tax than are those found in Washington, 


. fal 


,aeitsisa ,asgsw to sertg9b {fsuyeuny as at bsaogmoo sis bas 
_.a9divise bis gizerte fLsnoeteg mont entutex todto ins 
ysbot tetsetg neve od aeoliduob biuow enoks toqo7g eaent 
odd at woine diet to TS9Y aseq ait serdotdw ,@Le@L nt aadt 
ni sonsoltingts tsetg to ois atoat eaen? -aotste. bed tnU 
.8920gtuG tere 448 ee sn10 ont edt of sraset oF esbeseds wns 
;anosset owt tT0T 

ait {[Isma ets asmoont to ALud eds conte ,tettt 
agtst edt astisisa bas asnsw bid ylogisl datenoo brs tnvoms 
owol od teum 

todawa ody bas Ilana ots eoemoomi sonia ,bnoose 
nottettetaimbs to 2009) edt ,epiel at gukttoqet enoated to 
figid es ie Page ed qldad org ivow 

ntaxooell aott Bab eat to alsylens telbate A 
anestito ods yd henagtes emoont ton oft to Rd. aa tant aworde 
-setisise bas espzaw to botetenoo erer at etste tedd to 
bas Latot ot to Ré.80 boettqmoo 0008% woLed eemoomt oa? 
egatevs eT . .fetod aft to RIB , ,000,0.L¢ woled secs fags 
Das oSAe, S@ asw 000,0L¢% wolsd aemoont oidexad aetmooetW to 
=109 9XT .ova .8S asw aotadbdued at eyetevs talints oat 
to mofLtudinzde ib sit yd owodea 88 tfenoo lew me mecbere 
edt tot sldstovst stom sadwoios ‘etoteteds 8I8 perenne 


 radetahdaiy ak Davsot seodt sts asdt xst ponnbe ext to eau 


142. 


in that a less proportion of the incomes are below $5000 
or below $10,000 and a smaller proportion of them consist 
of wages and salaries. 

Moreover, the income tax is distinctly an urban 
tax. That is, a very large proportion of this tax will 
be paid by those who reside in urban districts, where the 
large accumulations of wealth and income are normally found. 
In 1919, 31.4% of thé federal income tax was paid from 
New York State, and of this it has been estimated that more 
than 80% was paid from New York City alone. On account 
of the deductions and personal exemptions allowed under 
every income tax the rural sections in any state contribute 
only a relatively small, amount. Under any equitable system 
of distirbuting the proceeds of such a tax in Washington, 
the benefits would accrue chiefly. to the cities. 

It has been demonstrated also, that neither the 
income tax nor the flat tax on intangible property will 
operate successfully except under the most favorable ad- 
ministrative conditions. In fact, the general verdict 
es late as 1910 was that state income taxation was and 
would be a failure, largely because of the administrative 
defects. Wisconsin changed this verdict by placing the 


income tax under the control of the state tax commission 


eShlt 


0008$ wolfod sia sonoont sds to-noltiogotqg asel s tsdt at 
tatenoo medt° to motstoqotq tollema s°5ns°000,0L¢ woled to 
easttsise bas asasw to 

nediv ns vitonttetS ati xst omoont odd ,29v09TOM 
ffiw “at aftdi to notitoqetgq sarel visv s ,at tsHhT 9s xeF 
edt exodw jetobisteth asdty ot sbhtasi orlw saosit yd btsq ed 
ebayot yilsmton sts smoont bas dtissw to encttasnecss satel 
mort bisq aswoxsd omoonk Istebst edt to RSLLE ,CLeL al 
stom tsHht besanttao mood ead Si ceidt to buns yotsatea x20¥ wo 
tnyooos nO .emols ytid AtoY wot mott bisq asw S08 ast 
tobnas bewollfs anotiqmexs LIsnosteq bas emottoubob odt to 
etudtitnos etste yas at anoltosa Lsrut odd xad° smoont yters 
meteye sldstiups yas tebav etnyoms Ifsme yLlovitsfot s ino 
mosvanifesW at xst s dose to aebesootgq sdt-gnitudtttetb to 
~eeftio sds) otoyltsindo ewioes blyow adttoned ont 

edt. todtten tsdt ,oals betsttanomoh nosd esd tI. 
ilLiw ystoqotq elfdiansini ao xst selt oft ton xst smoont 
=bs el[dstovst seaom sit tobaw tqooxs yilutaasooue stsisgo 
sgoibtev Isteneg oft ,tost ni ~enoldibnod svitvsitetinig 
bas esw nolisxss smoont otseta tsdzt asw OLCLies.etsl 2s 
evistsitainiobs ods to seuysosd° YyLlogisl:,sivitst s ed  biyow 
edt gntosiq yd soibitev aidt bsanado atenooalw ~atoeted 


-ftolaatmoo xsi state odd to Loténoo eAt tobnu xsi omoont 


143, 


and providing new and comprehensive administration machin- 
ery. All of the states which have been willing to follow 
the principles of income tax administration first developed 
in Wisconsin have found the income tax a fairly satisfac- 
tory source of state and local revenue. Unless a state 

be willing, therefore, to give most careful consideration 
to the development of sound and impartial administration, 
it were better not to attempt the income tax. 

We find thet certain conditions are essential 
for the best results under the income tax; 

First, a very effective centralized administra- 
tion; 

Second, a fair degree of concentration of wealth 
and incomes, for the bulk of the tax must come from the 
larger incomes, if sufficient revenue is to be produced 
to justify the tax. 

We have recommended the establishmmt of a 
state tax commission to be composed of competent persons, 
and to be endowed with administrative authority sufficient 
to effect a reorganization in assessment methods and gen- 
eral tax administration. If this recommendation is ac- 


cepted and adopted as we have conceived it, the central 


Ohl 


-cindosm moktsiteatninds sviensdetqmoo bis wena gakbtvotg bras 
wollot ot gnilliw noed eved. adtdw dotste edt to ILA sxx 
beqofevebh tertt nottsttetaimbs xst omoont Yo eelqtontitq ont 
-ostatise yitist s xsd smoont eft Savot ove altanooetW at 
stste s aaelaU © ,eunevet Isool bas etste to sorves yrot 
mottstebteanoo Lutorso teom ovis ot ,srotetTodt ,gnilfiw of 
ptotisrtatnimbs Istitsqmt bas bawoe to tnemgofsveb ont of 
-xet oitoont ost sqmetis ot tom tetted srew tr 

{sidnoees ors anotstbnoo aistreo ssNt ‘bntt oW 
rst. omoont edt tobay a@tiuest feed ont tot 

-sitvainimbs bexitisrineo evisostts yrov s ,terit 
. mois 

dtifsew to notsstinoonoo to setseb rtist s , bmooee 
oct mort emoo saum xsd edt Yo’ Alud edd rot ,eemoontr bas 
beoubotq ed oF at euuever tnetotttwa tt ,aomoont tegrsl 
xst odd yitteut ot 

8 to tmmietidstes eft bobremmodet evant of 
<anoateg treteqmoo to beaogmos sd ot motastmuos xss stata” 
tnelottive yitrottus evitsitetnimbs dtitw bewobns od ot bas 
-19g Dns ebottom tnomeesees at notissinsygtost s tostte ot 
=95 ef notésbnonmoost eiAt tI sNotisatetnimbs xsi Lsts 


Istineo ont . ti bevisonoo evsd ow aw besqobs bus’ betqoo 


144, 


organization would be provided, and there would remain 
only the special framework for the introduction of competent 
income tax administration, The latter would involve the 
organization of the state into districts and the erection 
of income tax assessment machinery in each district, under 
the absolute control and direction of the central tax 
commission. The assessors of income would need broad 
powers for the discovery and assessment of incomes. 
It is clear that such an organization would neces- 
sarily be expensive, although the cost must be considered 
in relation to the yield. Experience in Massachusetts 
and New York indicates that administrative cost of the 
income tax will be about 3% of the tax collected. It 
would probably be in excess of this ratio for Washington. 

| We have already presented the general situation 
in Washington, with regard to the second condition for the 
success of the income tax, namely, the concentration of 
wealth and incomes. There is a wide diversity of econ- 
omic conditions in the state ranging from the great areas 


with sparce population and low incomes to a few urban centers 


, pyc bivow erent bas ,pabivoxq ed bib gow nottssinagto 
taetoqnos to moisoubotiat eft toi Atowems tt tsfoege oad lao 
edt avlovat blyow tetiel eat toftsiteinimbs xst omoont 
noitoors oct bus efotitaib otmt etate edt to nobtsstaago 
tobay ,totiteth dose af ytenidosm porn 8S omooas | to 
xst {Istéme0 sdt to moitostib bas Loxtnos etuLoads oat 
bsotd bees blyuow emoont To etoaaeaes ealt notes tomo 
_ sagmooit to ¢nemeesess bas ytevooath ody tot etewog 
-s90en bluow moitssinsyto as dowa tsds aselo ai $I 
hetebhbtenoo ed teum taoo eft dauodtis ,sviansgxs od ylirse 
etteeudoseasM at soroltieqxa ebfoty edt ot motssflor at 
edt to teoo svitsiseinimbs isd} gessotbnt A10¥ welt iki 
tI  .»betoetioo xst odd to RE spade ed {[iiw xet smoont 
-totgnidasW tot ofvst eins to aegoxe at od Udedoxs bLuow 
aotisutke L[steneyg sot betasastgd yaserls even oW in 
emt tot aoLiibsos Drooea edt ot bisgot As iw tot kdaet: at 
to moisvsismeonos eid ,yfomsn .xst emoont sat to 2a99oue 
=f099 to ytiatevib ebiw s at sitodT. .eemooa! brs Ht Leow 


assets tsetn edt mort gauigneat otesta odd at anoisibaos olfmo 


atosnoo asdiy wet s of asmoomi wol bus motislugoq sotage ddiw 


145. 


in which the bulk of the capital resources of the state 
are concentrated. The income tax would be of very lite 
tle advantage as applied to the rural portions of the state, 
with the exception of certain small areas in which inten- 
sive agriculture has been developed. These areas would 
probably produce little, if any more than enough to pay 
the cost of administration. If the income tax could be 
applied to the cities alone it would be fairly productive. 
But its administration must be state-wide to be effective. 
Furthermore, a large proportion of the incomes 
of the state consist of wages and salaries, the average 
of which is relatively low. It is true that the income 
tax is a means of reaching these classes by direct tax- 
ation, and the other methods of accomplishing this result 
are less satisfactory. But on the other hand the aver- 
age return would be small, the tax on such small taxable 
income, returned by the salaried and wage earning classes 
would be at low rates, the yield would be low, and the 
administrative expense therefore relatively high. Under 
these circumstances the public treasury would gain little. 
In view of these fects regarding the whole sit- 


uation, we are of the opinion that it would be unwise to 


abr 


etsta edt to asotyoaet Istiqso ext to wLud sat doidw at 


mtil ytey to od bluow xed emoont odt  beteténeoncs ots 


wotste edt to emottrog Isitut oot of betigas as egstievbs eft 


enetat doidw at asors [Leme xketx1e0 to nottqeoxe end dit iw 
bluow asots eo ‘ beqoLeveb mesd asdf etst luo tins ave 
ysq o¢ Agyone neat avon yas Tr PoLdtEL soubotg vidadorg 
od biuoo xst emoont eft TI -molisttetnimbs to $ao0 exit 
sevitouborg yltitst ed blyow ti enols aetito ont ot bei tqas 
.ovitostie od of ebiw-siste ed geum notiartatambs ett tua 
aomoont end to notiroqorq eget 8 .otonm ond ryt 
egstevs oft ,aotisise bas a9gsw to tatenoo stste oad to 
emoont edt tedt eyxt ei aI swol vleviteler ai doisw to 
-xet toeztb vd gesesfo saedt gaidoses to ensom s af xst 
divest abit gnideilgmooos to abosdtem conto ont Cas tere 
steve ont baed toddo odd mo td .qrofosteitse sae! 98 
ef[dsxst I[isme dowa 10 xst oat ‘Tren od bivew NtusIsTt 956 
aseesto gniatse sgsv bas betisisa odt vd Sowine 0%; emcsat 
edit bus ,wol od blyow blety ens ,eetet wol ts ed bivow 
t9baU = . ogi’ YLovitsiox Statedests ganecxs ovitettainimbs 
solssil aisy bluow yrwwasett oflduq end asonstemyotto s2endt 
-tie eLosw oft gntbiego1 atost saodt to wolv aI i 


ot satwny od bivow sti tsdt motniqo sit to ots ow ,motisu 


146. 


introduce the income tax at this time. We approve the 
principle of the personal income tax under suitable con- 
ditions, but we do not consider that these conditions 
exist at the present time. To a large extent the same 
ends may be met by the introduction of a flat tax on in- 
tangibles, such as we have already discussed and approved. 
In our suggestions for the future development of the state’ 
revenue system we have proposed that at the proper time 
a personal income tax be introduced. 

we feel that we are confirmed in this conclusion 
by the fact that the federal government continues to in- 
pose very heavy rates of taxation upon incomes. There 
is no immediate prospect of a reduction in the federal 
rates, and we are reluctant to recommend the introduction 
of additional income tax burdens while the existing fed- 


eral burden continues. 


11. GENERAL SALES TAX: 


It is the unanimous opinion of the committee 

that a general sales tax is not a proper tax to be used 

in the State of Washington as a part of our revenue system. 
In this connection it may be of interest to note 


thet the members of the committee on tax investigation 


2Oht 


eis svotqgs 9W .omit eidt ts xat omoont edt sonbotinat 
“i109 ofdstiue tebau xet emoomt Lanoeteq acid to slqtonizg 
Senehs Likbo eeeds gsdt tebfenoo ton ob ow Jad ,emottip 
omse ont Snetxe ogists of omit inesetq odd ts tains 
“af mo xed tal? 8 To nottouborsnt sit yd yom ed Ysm abas 
-bevotqgs Sas beesuoath ybserls eve sw es dove seeldigauss 
desste ont to tnonmpoLeveb ezutst only me sitet anedhoa to at 
omit oqortg est te stadt beaoqorg sved ow moteve SUnEVoT 
_ ebsoubotiat ed xst smoont fsnoetoq & 
notemLonoo aisadt nt bearftnos 91s ew tsHdt Iset oy 
emi o¢ aountttso stasmmtesvog LIetebst sdt tad fost odd yd 
_ etodT .asmoonl foqs mottsexst to aeisi yvsed YIev eaog 
Lstsbet odd nt nottoubet & to goeqeotg otsibomrt om at 
nottoubextat eid bmerurose7 of tnatouLor ets ow bus ,aetsi 
-hst gaiveixs oft olin anebasd xst amoont Ietotsibbs to 


eaountinoo mebrud Isis 


:XAT @0.1A2" TARMNED ~. LL 
sestinmos sdt to mofatqo abominsnis oft at tI 
beev od of xst tsqorq s ton at xst esse Istane3 s tert 
meteye oumever-tvo to ti1sq s es MosanidesW to stsse oft “at 
eton os sSeststiat to 9d vem Ff mottosanos 2tdt al 


moitsgitesvat xat so sotsimmoo sat to aredmem ont tens 


142. 


of the State of Oregon concur with us in this belief, both 
committees rejecting the principle as unsound. This de- 
cision was arrived at after a careful study and consider- 
ation of the principles involved. While both committees 
are not prepared to go.to the extent of stating that the 
sales tax principle may not be 2 proper tax for the federal 
government, its use by a. state cannot be justified by any 
of the arguments in favor of a national sales tax for 
the following reasons: 

aa The sales tax is a consumption tax and is, there- 
fore, an added.business cost. By this we mean that if 
the State of Washington alone were to adopt the use of a 
sales tax, either on retail sales or upon the products 
of the wholesaler, its application would increase the 
cost of commodities in the State of Washington as against 
the same commodity in the surrounding states, and would 
of necessity make it more profitable for the average cit- 
izen to do all the business possible with mail order houses 
and other foreign dealers, rather than with his local 


tradesmen. 


TAL 


dtod ,tetfed aids at eu Mtiiw twomo9 10590 to odede ont to 
-95 efdT ebuyoany es ofgqtonitg ent anisoestet asostinmoo 
-19hfamo bus ybuta Iytetso s totis ts bovinis asw noteto 
as9qst Lmmoo aed eliny sboviovat asigtoniig edt to noite 
odd teas gattsts to tnotxo orld oF os ot Pata ati torr 91s 
Lfetebst ot tot et soqped 8 3d he v4 Ysm olgtontad a3 aotse 
yas yd DSoititeut od tonanso otsta 8 yd au edt _ tasmrrsv os 
tot xsi esls2e Isnoitsa s to rovet at atnomygits osid to 
; bkéenes gatwolfot odt 

-9t9ns et bas xsd molLiqmsenoco s et xst aslsc eT Me 
tL Mads giae: ow etds ya wte0o aaontaud bebbs as ,etot 
& To say oat tqobs ot stew onols notan ile sw to otsts ont 
 etowborg edt nogy to aslss Ltstet mo todste xsd aelsa 
ont easetont bluow motscotlqqs eti ,telseoforw edt to 
taniege as motanitasW to ssste oti mi Set? abubaeo: We teo0o 
blyow bas ,eetste gntbnvotive ont nt eb ibeames emea odt 
-tio sgstevs oft rot eldssitotg stom tk sasm ysiaesoon to 
asevonl tobto [fam datiw sldteeoq aeenteud edt Ifs ob ot nosi 
{sool ain dstiw nsdt tondtst ,atoisob mgtetot tedso bas 


-ftenesbstt 


148. 


It is urged that the sales tax, like various 
other taxes, is in any event passed on to the ultimate 
consumer, therefore, why not place the tax definitely and 
collect it in the first instance from the consumer? The 
following illustration may be used to show the effect of 
such a tax, if our state undertook, alone, to make use of 
it. We have in mind its effect upon the small manufactur- 
er who manufactures an article that goes into the creation 
of a subsequent article, for instance, the manufacturer 
of lumber. The sale to the box.manufacturer must be ac- 
counted for. In turn the box manufacturer. sells his 
boxes to 2a jobber. The tax is also applied. The jobber 
in turn sells the boxes to the fruit producer or the salmon 
industry or the coffee distributor, and the tax is added, 
and so on down the line. 

Everyone knows that the manufacture of boxes is 
an industry that is necessary in this state, and if the 
tax so accumulated brings the price to a point where the 
manufacturer cannot make a profit as against the boxes 
made in Oregon or Idaho, he will be compelled to enter 


some other line of industry. 


2 BhL 


evotisv sxtt .xst esfse ont tedtd bogiw ef iI 

etsmitiu oft of mo bseesq dneve yne mt at .aexet ‘todto 
bas yletinttob xst eft sosiq ton yw ,stotetedt ,tomvanoo 
oft  Ftomueattod sit mort -Sonstant tertt ods ‘at tt tosflos 
to tostts odd wore of bday sd yom mottstterlit gnttwollot 
to sag sasm ot ,onols ,Mootrobny etste two Tk ,xet¢ & dove 
stutostuncm Lieme ont moqu tostts ett butm at eved ow tt 
mnottseto ent ofnt a90g tent ofotixs me esausostensm odw to 
qotusostunsa oft ,sonstent tot ,afotits tnespeadue 6 to 
-os od teym teitstostunsm xod oft ot ‘efsa od?  <Lasdmel to 
atd effoe texrvtostunsm xod oft ntut aI .tot betnavoo 
toddot eff  .betiqgs oels ei xst oT et9ddot s ot aexod 
nomfse ott to tooubotq sist? odd of eoxod odd effoe nisd mt 
.bobbs et xst oat bas todudiatetbh settoo oft to ytteubal 
Oh om eomtl odd mvob mo o8 bas 

ef esxod ‘to stutostunam ent sit awond saoyrovet | 
edt ti bns:,stste aint at yvtseesoen af tsdt yrteubat ns 
“ent overw tntogq s ot softq ‘ood ayntud potslumoos oa xet 
aexod oft gentsgs es ¢itotg s even tonnes tetutostunent 
totne of beffoqmoo ed [fiw of ,odsbI to sogetO at 95am 


-Vitaubat to omti tonto omoe 


149, 


Ze The retail price of some articles of local cone 

sumption is fixed not only by the law of supply and demand, 
but by the originator of the article. Were the retailers 
required to account for a sales tax on this class of mer- 
chandise, the merchant would be compelled to pay the tax 
on his gross sales, but being unable to increase the price 
of the article by the amount of the tax on account of the 
policy of price control, he would be obliged to add it 
to the price of some other article carried for sale. 
This practice, if carried out to its logical conclusion, 
would undoubtedly force the merchant to raise the price 
of all non-price-fixed articles in such amount that the 
merchant could not meet competition. 

3. Cost of Collection; 

If the sales tax principle only meant the fixing 
of the percentage to be paid to the state, without the 
necessity of creating an immense state bureau with agencies 
in every county, city and hamlet, with the necessary force 
of inspectors, auditors and accountants, the system might 
seem more feasible of enforcement, but it appears to the 
committee that the enormous amount of machinery necessary 


to properly collect and administer the tax is out of all 


enoo Ieo0f to aeloitis omoa to solig tister ox Ss 
,basaeb bas Yloque to wel edt yd ylno ton bexit af notdqouse 
arelister edt sxreW .oLotéss ot to totenigizo eis vd Sad 
-1om to easfo aidd mo xsd aelse 8 tot t¢ayooos of bertupes 
xsi edt yea oft beflegitoo od biyow tmsdotem ont satbasso 
~ gott¢ edt sasstont of sfdsny gnted gud ,aelse adota ast no 
att to tmuooos mo xst edt to tawoms ond yd efoti«s ont to 
+: bbs of bogiido od bluyow of ,Lordmos sottg to yotLog 
.ofse tot betrreo efotiuxs roto Smoa to sottq ont ot 
emotaufonoo Lsoigol att o¢ tuo boit1eo ti edbs cane atat 
sottg oft oatst ot tnsadotem ot sorot yibetduobay biuow 
edt dad ¢ayome cove at asfotizs bextt-ooltq-non Ils Yo 
snottiseqmoo gsom ton bLyoo tuadoton 

= sottosllod to teod 7 

giixtt edt gnsem yino sigqtontiq xsd astse off TI 

ent tuoltiw ,stste exis ot bisq ad ot sgaineoteg ond to 
asionegs ditiw ysetud state sanonmt as anissero ‘to viteasoen 
9ot0t vrsasooen edd diw toLmuadt bas yttd eYsauoo easy? at 
toigim moteye oft SS ouatadcios brs’ atotibus Ws scahae to 
edit ot exrsscqs ti tud  tnameototme to eidtaset stom 996 
YiIsaesoon YIsnidosm to tnvoms avomtons oft tsdt ssttinmoo 


ffs to tuo et xsi odd asteinimbs bas tosifoo yLtsqorq ot 


150, 


proportion to the amount that could be expected as the 


return for its use. 


4. Sales not Possible of Taxation: 


It must be remembered that out of the bulk of 
sales made in the State of Washington over a period of 
a year, estimated at approximately $4,200,000,000 (which 
includes both retail and wholesale) a very large proportion 
is represented by sales of lumber for foreign and inter- 
state commerce, none of which can be taxed by the state. 
When we take into consideration that of our principal in- 
custries, namely, lumber, fish, wheat and fruit, which 
represent only the sales made of our own natural resources, 
by far the greater percentage is sold outside of the state, 
and therefore untaxable; and the great volume of sales of 
goods made in this state produced elsewhere, also not sub- 
ject to taxation, the committee are unanimously of the 
Opinion thet a sales tax of one, two, three, or five per 
cent, would be a very disastrous measure for this state 
to adopt, and in turn would not produce enough revenue 
to justify the cost of its collection, 

(N. T. A.Bulletin, Vol. 9, p. 270) 


O6L 


eft as betosqxe od bl{yoo tsdt tavoms sat ot moitttoqorgq 
3 e9au att tot mistot 
. :mottsxsT to eidierot ton soise uy 

to stud ait to tuo tad beredmemer od teum $I 
to botusq s tesvo notynidesW to sista odd at obsm aclsa 
Hohsdw) 000,000,008.a4 vietamtxorqes ta betamténs .uaey 6 
nofjtoqotq enisl ciev s (alpeod on bua Listes déod aebuylont 
~totat bas mgtetot tot rodmusl to eefse vd bedaoeoxqe7 et 
eotste odd yd bexss od aso doidw to enon , 90TSmuIOD osaee 
at Isqtoniag aso to tsedt motiarebtenoo ofnt sist sw nodW 
Boker: « ¢iutt bas teosw ,delt tod + CLemsa ,eokiteu 
sBOOTHORST fstujsn mwo tyo to sbsm eoLse ons “vim tage9tqet 
,ststea ods to ebtedwo bloe et sgsinsotsg totsertg edt rst wW 
to eef{se to enwilov tsetg oft buns -ofdexatay etototsds bis 
-ua ton oals ,etedweale beoubotg atare att at ebsm aboos 
edit to ylavominsny ots sstsinomoo odds mahsnane os tost 
toq svit to ,sermt . ows .2mo to xst eslse s todd foinigo 
etetea aidt tot etvesom ananvanath sachet od biyow ,dn90 
eunNsvet Aguornse soubor ton biyow mit at bas .tqobs ot 
 ettoetion att to ta0o ect ytiseut of 

(OVS .q .@ .LoV .atdoliud.A .? .U) 


151. 


12. CHANGE IN MEMBERSHIP OF COUNTY 
BOARD OF EQUALIZATION: 


The law now provides that the county assessor 
shall be a member of the county board of equalization 
and shall be the clerk of the board. We recommend that 
the board be composed of the county commissioners with 
the county auditor acting as clerk thereof. Cities should 
be allowed to retain the representation on these boards 
which is now provided by law. This remedial measure is 
suggested, by the committee in response to a general demand 
of the public, on the ground that it is not proper for the 


assessor to sit in judgment on his own work, 


13. POLL TAX: 

The present poll tax law was enacted by the last 
state legislature on the assumption that an emergency ex- 
isted warranting this extraordinary form of direct taxation. 

In the opinion of the committee a poll tax has 
no place in a modern system of taxation designed to function 
as a permanent and equitable means of raising revenue to 
meet the cost of government. 

We therefore recommend the repeal of the poll 


tax. 


& 


-LéL 


YTUUOO TO GIHSAMSMN UI MOWAHO .Ss 
SMOLTARIGAUD © 10 -GAAQG .) > 


toezsaas yinueo odd dst ashivotq won wsl eadT 
aoitssifetps to bisod yiasoo edt sto tedmem s od Il sde 
tedt ‘boommoost oW ../basod et to nitoflo edt od Lisda dns 
dtiw etomoteatsmoo yioyoo sit to Sseoqmoo od hbisod ods 
bHLuote-asithods .toorert altefo es gaitos totibus, ~iasoo ods 
ebusod seendt no noibtstuseetqer edt atstet.ot boewoLlls od 
ef etuasom Isibomert atdT, «.wsl yi bebtvotq wom el doidw 
basush LIstenen s ot senoceot at sats iumoo edt yd -beteogguea 
ods tot togota som ab dk cand bavotg edt mo», obldug sooth to 
ettow awoveld mo dnsmgbyt ar ila of teaageas 
KAT II0d .8L 
gasl eat “wd botosne esew wsl xst Loa taeeorg oT . | 
-x9 yorrey tema os tedd nottquwe 2s oxtt no emutsiaigos otata 
moitsxst tosttb to aot wrstibtosrixs aids gubtnotssw betel 
asi xsd {foq 8 eatiiatie edt to notntgo odd aI 
nottonst ot ‘Reng tees nottsxsd to mateye mtebom s at eosta on 
od SUMISVOT gitetst to ansom eldstiups bas tnensmieg 8 28 
. -daamerevos to teo00 oft toom 
{Loq exit to Iseqe ost brommooet stotersdd eW 


kes 


152. 


14, TAX EXEMPT SECURITIES: 


We submit herewith an extract from the report 
of the Congressional Committee on Ways and Means, on the 
subject of tax exempt securities; 


“The Committee on Ways and Means, to whom 
was referred House Joint Resolution 314, a resolu- 
tion proposing an amendment to the Constitution 
of the United States, having had the same under 
consideration, report it back to the House without 
amendment end recommend that the resolution do 
pass. 

"The amendment proposed strikes at an evil 
in our system of taxation which is already great 
and, if unchecked, will grow to such magnitude 
as to even threaten the existence of our in- 
stitutions. The Constitution of the United 
States, as it now stands, not only permits the 
issuance of tax-exempt securities by either Federal 
or State Governments, but absolutely prevents the 
Federal Government on the one hand levying income 
tax on securities issued by the several States, 
and the States on the other hand from levying 
an income tax on the securities issued by the Fed- 
eral Government. Under these conditions there 
has been brought into existence an amount of 
tax-exempt securities variously estimated at 
from $10,000,000,000 to $18,000,000,000,. The 
existence of conditions that enable any muni- 
cipality or political subdivision to issue tax- 
free securities is a constant temptation to is- 
sue such securities in larger amounts than is 
necessary. It amounts to a subsidy offered to 
every such corporation with regard to its own 
direct borrowing. It also operates as an in- 
ducement to every municipality to have all kinds 
of public utilities owned and controlled by the 
municipality itself, thereby escaping its proper 
share of Federal and State taxation. In 1921 
over a billion dollars was issued of tax-exempt 
securities, and the amount in existence is 


Sél 


:GXTTIAVOSS TIMEXE XAT ,SL 


troget sdt mott stositxe! ms ditwerod tindve oW 
eit mo ,anseM bus aysW mo soti£foumod fanotseergnod sit to 
sasitinuosa tqmexe xst to tostdue 


mow ot ,ansell bas eysW mo sestimmod oft" ~ 
‘esloeet s ,dLE nmoltuloaeh tnflol sevoH bextets1 esw 
moitutisanod eds ot Inembnoms ns guteogotq mois 
tobas omse st ben gaived ,aststea betinv edt ‘to 
uot iw eaNyoH odt ot Axosd st Stoget ,motisirebianoo 
ob mottuloest eit tads Snoumtoosr bas srombasnis 
.8asq 
five as ts asaitte hbosogotq sasmbaems oT" ) 
tsemg ybsetts ef dotdw nottsxst to meteye i060 at 
sbutingsm dosa ot worg ffiw ,bodosnonn Tf ,5as 
mk tuo to goneteixe ent metsouit neve ot as 
betinU odd to notsusitanod sat -atoktutitea- 
edt atimnisq yino fon ,abnstea wom tt es ,astste 
Istehbef tsdtte yd aefttiituose stomsxe-xst to. sonsvack 
sit atneverg YLotiuloeds gud .acnemmitsvod etste to 
emoonfk yaiyvel basd emo oft mo tnsmntevod Istobet” 
.29tste Istevee ont yd bouset estttivose no xst 
patyvel mort basd srondto soit mo astste oft bas 
-bef oft yd beweet esftiinuoce ot mo xst smooniugs 
erent amottibnoo saedt tebav etroamreven Isrse 
to tavoms ns somstetxs otmt tiawotd assd asc 
ts betsmitee yLavolisv aetituivosa tqsisxe-xst 
enT ~000 ,000 000 ,8L% ot 000,000,000, 0L§% mort 
einum yas sldsne tsdt anotifbmoo to sonetatxse 
exes suyacloot moLtatvisdyue Isoitifog to ytiisqio 
-8f o¢ mofststamet tnssenoo s al asitiivose set 
ai asdt atnasoms tezrsi at asttinuvosea dove oua 
ot betetto ybladye s of atayoms tI -Yiseasoen 
mwo ati. of bisget Atiiw noitatogqtoo dove yusve 
eii m8 es aetsrsqo oals 31 egutwortod soertb 
ebnix If[s oved ot ystilsqioinum y19ve of tnemoeouh 
edt yd bolflortnos bus bonwo estititsuy ofidyug to 
wsqoig ati aniqsoas ydoredt /tisati yttisqtoiaum 
{sel al foitsxas sista bus Isirebhbef to sitsde 
tgemexoexes to bouselt esw etsi{lob notLlid®*s t9vo 
ef sonstatxe ak snyoms oft buns ,asttizvosa 


153. 


constantly increasing. It is obvious that this 
condition of affairs makes it difficult for pub- 
lic utilities privately conducted to maintain 
their financial condition, for just in propor- 
tion as the money can be obtained cheaper on 
bonds thet are tax exempt the rate becomes higher 
on those which are subject to levy. When so 
large an amount is invested in tax-exempt secur- 
ities the inevitable result is that it is more 
difficult to obtain money for ordinary private 
‘pusiness and that investment in productive bus- 
iness is discouraged. The rate of interest re- 
quired from private business is raised in pro- 
portion to the amount invested in tax-exempt 
securities. So also as the Federal Government 
finds less amount of securities upon which an in- 
come tax can be levied the higher must be the 
rate on the amount that is subject to tax. 

"As time proceeds, the mass of tax-exempt 
securities, already so great, will continue to 
jnereease until every inducement will be offered 
to the man having a large income to make his 
investments solely in tax-exempt securities, and 
even the comparatively small taxpayer will find 
it to his profit to invest in them. In the 
meantime the revenues of the Federal Government 
shrink and the income tax will be collected 
largely from those who have only comparatively 
small incomes. This condition can not but 
have a highly injurious effect upon the business 
of the country as well as the revenues of the 
Government. 

"That some benefit is derived in certain 
directions by the issue of tax-exempt securities 
drawing a lower rate of interest, is not to be 
denied, but the majority of the committee are 
satisfied that these benefits are slight com- 
pared to the injury inflicted by the present plan. 

"The amendment proposed, being merely permissive, 
would not absolutely require that bonds of the 
Federal Farm Loan Bureau and the joint stock land 
panks be taxed but in practice it would have that 
effect. Whatever might be said as to the pro- 
priety and necessity of such bonds being exempt from 


~56L 


efdt tent evotvdo at tI egaitasotont yitasteanoo 
-duq tot tivoltitbh +i esxsm etistis to morttbaos 
aistnism ot betoubnoo yletsvinrg.asttif{isgy off 
-tocotg at taut tot totstbnoo Istonsnit tioeds 
mo teqssio benistdo sd nso yasom sft as molt 
todaind asmooed stsit oft tqmexs xst sis tsait ebnod 
oe memW .yvel ot soogdue o1s fotdw ssods no 
-tuo0a tqmexeexst ak beteevat at tavoms ns syrat 
etom ef si Ssdt et tlueet oldstivent edt eaottt 
stsvitq yisntbro tot venom mistdo of tivotttib 
“aud svitoubotq at tnemteovnt tsds bus seenteud- 
-9t seototnt to sist oAT .begstwooeatb at acont 
“eotq mf beetsx ef easntend etsvirg mort bettup 
tqutexs-xst ai boteoevnt tavome odd ot mottrog 
tnomnmrevod Isteb9t ont as oats 02 ~editizyose 
ant ns dotdw mnogu eettitrvoses to tnavons eesl. batt 
-edt ed Faum tofatn oft betvel ed aso xst 90109 
sxst ot tosotdue et ted? tavoms ot mo otst 

tomexs-xst to aesm odd ,abseootg omtt eA" 
ot egnitnos Litw .tp9t, of Ybsetls ,eestitirvose 
berstto sd Ffliw snemeoubnat ytevs Litag sasotout 
ein oofam'oF° smoont eatsl's give oem’ Sct of 
br&,eetittvose Iqmexe=xst ni y[Sfoe efnomteovnt 
batt IfLlw reysqxet Lfeme yLevitsrsqmoo, ont neve 
ont oI’ -.medt af stesvnt ot ti£totq etd of tf 
snemntevod IstsbeT oft to aeunsvot soit emtinsom 

hoesselfoo od Ifiw xst somoont oft bre uaniarce 

yfevissrscmos ‘yino oved ow eeodt mort yfeprel 
god ton nso noltibnds elfdT -esmoont L[fsme 
eeonteud edt nogy tostis exoliyiar yideit s sved 
ent to Bouvet eit as {flow es vastauos sit to 
', Snoemmre von 

fiistroo mivbeviteh ef titensd smoe tedt" 
asSttinuvose sgmoxs-xst to oveet sdt yd geoitostth 
$d o¢ ton at .seetostnt to stst aswol s guiwst 
9Ts sett tomes sit to ystitotjsm ods gud, bsiasb 
-moo tigtie sts eftitensd sesrlt terlt: bettettcs 
mslg teseacrq oft yd bototitnl yropat ont ot bsis¢ 

. ovieatsireq yletom anited .boeoqotq stnenbrroms oat" 
sit to abnod sacs etiupst vietuloads tom biuow 
basil xoote sntot sci bre usstud asold atel Istobst 
sadt oved hSiuyow ti sottosaq mk tud bexss ed sinsd 
-otg ot ot ‘es bisa ed Sdatim revetsdw . .tostts 
mort somexe “anied ebnod dove to ytteeoeosn bas ytettq 


154, 


taxation when sold in competition with so large 
an amount of tax-free securities as now are be- 
ing issued every year, the majority of the com- 
mittee believe that it would be neither necessary 
nor proper that they should be free from taxa- 
tion when the further issuance of competing tax- 
exempt securities is barred. Nor will this on 
the whole increase the rate of interest paid 

by the farmer. 

"The testimony before the committee was to 
the effect that only 5 per cent of the farmers 
who borrowed money were obtaining it through 
the Federal farm loan system and that the induce- 
ment to large investors to put their money into 
tax-exempt securities was constantly causing 
withdrawals from farm loan mortgages, reducing 
and making scarce the amount of private funds avail- 
able for such investment, thereby raising the rate 
of interest to those that were not able to obtain 
loans through the Federal land-=bank system on ac- 
count of its requirements or for other reasons, 
so that it was actually claimed that as long as 
our present system of taxation prevailed the Fed- 
eral Farm Loan Bureau operated to the disadvantage 
of the farmer rather than to his benefit. Cer- 
tain it is that, notwithstanding the prevailing 
low money rates, farm loans obtained from the 
private investors command a much higher rate than 
before the war, In this connection it should 
also be noted that the committee has many times 
had called to its attention that there was great 
difficulty in obtaining funds for the construction 
of homes and necessary improvements on real estate 
in the towns and cities and that an abnormally 
high rate is obtained for money loaned for such 
purposes. 

"There is no doubt, also, that the direct ad- 
vantage resulting from the issue of a tax-exempt 
bond to the governmental entity issuing it is 
usually much exaggerated, Before the present 
income tax law was enacted Federal, State, and 
municipal bonds always commanded a premium over 
other issues by reason of the superior security. 
This premium often amounted to one-half of 1 per 
cent, and naturally varied with the circumstances. 


AGL 


eptsl oe dttw meitissqmoo ai Sloe nodw sobisxst 
-od Sts wom es setiiivoea osti-xst to snmosws nc 
~1do sis-TYo ysitotsm odd |, a6ey yrteve bovaeh gai 
yrsedeosn roiston od blyuow JE ssdt ovelied estiin 
-sxSt Mott sort od biluode yor sent arsqotq tom 
‘xed gaifteqmoo To eomsueet tontivt sit asdw nott 
mo aids Ififw-touw -sbetrsd el astiiaucea sqmoxs 
fisq taotetal to stst ent oasetont elosw sds 

‘OL 8 Bd “ytemrst. ods yd 

of aswidottinmoo off stoted yromitest oaT® = | 
e@temtet sit to ¢neo 16g 8 yno Sadt sootte ont 
dmguorwdt tk gninisido erew yenom hewortod ow 
-soubat eft ¢edt bas meteye nsol mist IstobeT saz 
ofmk yenom alent seq of atotesvnt egisl of tnom 
“sntauso yildnstanod eaw asit¢ituoce. $qmexo-xst 
‘BifouSet ,esssastom asol mist mort efswerhds iw 
-[isvs abaiut etevixsg To. tawoms edt esortece gnitam bus 
eter oft oiitefsr yioreds .inemsesvni done tot olds 
nisido° ot 8ids tom stow tsdt sacdt of Sestatat To 
-os mo meveye uned-bael IsitebeT sxi sguordt ansof 
<anoaesst tonto tot to atnemetiupsr esi To gnwoo 

es sol es tsfit bemtsio yilseutos esw tt tedt o2 
-bet oft beltsevotq notisxst to met¢aye tnseestq wo 
sgeirevbaeth acs of betstoqo used asol mist Iste 
-199 etitened ein ot nents rzetltset romist sit to 
aniitseyvst¢ oft antbastedtiwiom ,tats al ti nist 
ert mort bentsido ansol mast ,eetsr yenom wot 
nsdd+stsr Torain Houm 2 Hbnsiitiioo etotesvni sisvita 
biuotle ti mottoenmoo efit aI. .iwswieds srotsd 
eomt? ynem est sottinmoo ent gski betom od oels 
tseta esw erent tent nottnetis att od belies bad 
soitourteanco oft tot ebaut aninisido al. ywinortttiIp 
sistas [set ro atnomevorgqmi yieeeeosn bis eemoi to 
* ¢witsmtonds me tect bas eettito bus enwos ont nt 
foue tot bensol yokom tot benikido ef eter Agia 
FeO .ese0qtyg 

-bs jostib ont tsht ,oels |, sdyeb on eat sxeadT® . 
tqmtexo=sxet s to sueet ond mort gaitliuesr egetasy 
ek o£ natuael yiisne Letnemrirevop ent of bnod 
tnsectq ont etoted betetsazsexe Houm yYilsveu 

bas ,otsta ,istebsT botosne esw wsl xss smoont 
‘tevo mutmesq s boebnmamnvoo ayswis ebsnod Isqioinun 
eUStiwose tofreqhe sdt to moeset YO souaed xodto 
toq [ to tisd-oene ot betnyoms netto mulneag efdT 
-eoonstenwotio ont atiw betiusv yiisivisn bas ,.smso 


155. 


There are a large number of institutions that 
are obliged by law to keep their investments 
in issues of undoubted security, which increases 
the demand for State and municipal bonds, even 
though these institutions derive little if any 
benefit from their tax-exempt character. 
"But even with this demand there still remains 
a surplus of tax-exempt securities over and above 
those required to fill the demands of the great 
investors and the institutions just mentioned. 
These bonds must be sold to the small investor 
and this surplus fixes the market for the whole. 
The large investor therefore is not obliged to 
pay in proportion to the benefit he receives in 
tax reductions. In this connection it should 
be observed that the Government today is able 
to negotiate its short-time securities at 34 per 
cent although the issue is not tax-free. While 
there is a difference of nearly 1 per cent in 
the interest rate between Liberty bonds that 
are tax-exempt and those that are subject to 
taxation, Secretary Mellon gave his opinion 
that this was caused by the comparatively small 
amount of the taxsexempt issue and that if the 
whole amount of the Liberty bonds had been tax- 
exempt there would have been little, if any, 
reduction from the rate at which those subject 
to taxation were negotiated, Former Assistant 
Secretary of the Treasury, Mr. Leffingwell, also 
gave his opinion to the same effect, It is evi- 
dent that the difference in the rate depends 
largely upon the amount of the issue, the date 
of maturity, and many other circumstances, as well 
as upon the tax-exempt feature. In a letter dated 
February 9, 1922, to the chariman_of the committee, 
Secretary Mellon demonstrated that at from any 
point of view the Government was a heavy loser 
by reason of the issuance of tax-exempt bonds. 
"These considerations have been for a long 
time apparent to those who were specially concerned 
with matters pertaining to the Federal revenue, 
As early as April 30, 1921, the Secretary of the 
Treasury addressed a letter to the chairman of 
the Committee on Ways and Means recommending to 


cel 


ta. enoltutistent to t9dmun episl 6 918 etoiT 
adneontesval aiodt geet ot wel yd begifde sis 
asesstont doidw ,yiituoee betduobaus te aeveaat ot 
meve ,abnod Isqfotnun bis etste tot bosmeb ssit 
yas. If efstifl sviceb enoltutif£ant seeds Savors 
“s _, -tetosisno, tgmexe-xst tlodi mort tfteasd 
antsmet {ftte orsedt busmeb elidsd ditw meve sua" , 
evods bus tsvo esitiauosa sJqmexeexst To aulquua s 
tsetg edt to abmsmed ont [Lit ot bexiupst sa otis 
ebomoitnsm sauy emoituticeant oft Das atogesvnt 
totaovnt fisme ont ot Bbloa ad taum abnod seonT 
-oforw oft tot torxttem oft eoxtt extqiuea eths Sos 
ot bogtido ton at ototetens totesval satel sit 
mf. esvisosz ed sitensd, art of moidtitoqotg ai yea 
bivorla +: mottosnnos eifft nl  .ancttoubst xss 
sides ei yehos tnommisvod ont ssdt bevisedo od 
19q¢ ts asisituose omtt-stome ett steivegen ot 
elt .9ett-xs¢t ton ef sxeel ont deuoritIs sneo 
ai tneo t9q I ylisen to eonsisiith s af sient 
stadt ebned. ytisdid neswied ete1 tesistat ert 
. ot soojdue ete tect aeodt bas sqmexeexsi sts 
sotnigo etd svsa nolfLeM yistetose® ..nottexss 
ifsme yLovitsisamos ert yd beavso esw eidt tasdt 
end ti tadt bus ouael iqmexeexst silt to tavoms 
~xed need bot ehnod yirtedil sdt.to tnvoms olfondw 
eyKs Tf ,slttil saeod sved biuow exert tqmexs 
tootdue seods doisw ts otst snct mott noisoubss 
tustebeeA tsmto=  .hotstiozsen s1esw nolisxss of 
cele ,ffLowgnttiel uM .yiwesorT edt to yistetose 
-ive al 1 .¢ostte omse ont o¢ dofntgo eld svss 
ehnsqeb sts1 ond mi sonsisttib sit sedt saab 
eisbh sadt ,.euveet oft to ¢nvoms edt aogu yiszisl 
ifew es ,asonstemworto tedto yasm Sas ,ysiistem.to 
betsb tsctel s al otutset, tquiexsexes ons mnogu as 
,oetstiomoo- odd .to nemitsdo off of ,SSeCL..€ yisuridet - 
ye mort gs ssclt betsitenomsbh molisM yieds1052 
toaol yvse s esw tnsmnisvop sat wetv to gntiog 
-abncd tgmexsexsi Io sonsveel sft Io noasst yd 
saol s tot need evad enotisisblenoo sesit™ - 
berre9ono09..yllsiosge sew onw sacit of t¢aeisqge seis 
-ounevet tsiebet oft ot gnintetisq etetiem ciiw 
eat to yistetoss oft ,{[Ser ,0& fixgA as yitss 2A 
te msmtiedo sft of azsdsel s beeaotbhhs yrveasetT 
ot gnibmemmoost ansell bus eysW ao settiomod ont 


156, 


Congress that it consider the advisability of 
taking action by statute or constitutional 
amendment where necessary to restrict further 
issues of tax-exempt securities, and again on 
September 25, 1921, in another letter, to the 
Chairman of the Ways and Means Committee, Secre- 
tary Mellon states: 

'The ever-increasing volume of tax-exempt 
securities (issued for the most part by States 
and municipalities) represents a grave economic 
evil, not only by reason of the loss of revenue 
which it entails to the Federal Government but 
also because of its tendency to encourage the growth 
of public indebtedness and to divert capital from 
productive enterprise. The issue of tax-exempt securities 
has a direct tendency to make the graduated Federal sur- 
taxes ineffective and nonproductive, because it enables 
taxpayers subject to surtaxes to reduce the amount of 
their taxable income by investing in such securities; 
and at the same time the result is that a very large 
class of capital investments escape their just share of 
taxation,! 

"Further, in a letter dated January 16, 1922, 
Secretary liellon said; 

'The most.important consideration is that the 
existence of the growing mass of tax-exempt se- 
Curities, coupled with the extremely high surtax 
rates still imposed by law, tends to drive per- 
sons of large income more and more to invest in 
wholly exempt securities issued and still being 
issued by States and municipalities and heretofore 
issued by the Federal Government. The result 
is to impair the revenues of the Federal Government 
and to pervert the surtaxes, so that instead of 
raising revenue they frequently operate rather 
to encourage investment in wholly tax-exempt se- 
curities, and even to encourage the issue of such 
securities by States and municipalities. This 
process tends to divert investment funds from the 
development of productive enterprises, transport- 
ation, housing, and the like, into nonproductive 


oct 


to. utiitdsetvbs oft tobienoo tir seit aeetgnod 
{snotiutéitenos to ssuststa. yd. moitos gnintss 
scontaut tokuseot. od yrseseosn oredw tnombnoms 
no misses bose ,asitituoee tqmexoexet to gaveet 
ent o¢ ,rottel ssdtons at .f[S@l .c& szsdmetgqea 
~9t098 ,ostsinmod enseoll brs eysW ont to nemrisasds 
sastete nolfoM yet 
Somexeexst. to omplov antesovoni-teve, sdT' 

eesese yd sued deom ot tot heveat) aettinvose 
otmomooe evsty s atnoastger (acitifegqtotaym bas 
sunsvet. to eaol st to noaseozr yd yino.ton ,five 
sud g¢uemrtovond I[s1r9obef oft of elistne ti dofdw 
fitwotg oft epetuoones of yonebmes ati to seusosd oels 
mott L[etiqss trovib ot brs esenbotdebat ofiducq to 
esttiauosa tqmexe-xst to exveet onT -9eirtgretne evitoubotg 
etve Istehet. bstsubsetz soit sism of yonebnss toorrd s. asd 
eefdsnes ¢£ sexsood ,svistoubotcqmon bas evitoetisni eexst 
to gavoms ont soubet of eexstive ot Sostdue etoysaxss 
sasitinvooe cove at gnttasvat yd esioont sidsxss xatocdt 
egisl yrov 8 tect ef tiueor. oft omtt omse od Js Das 
to ersde teut ries. sqeoas.asnomtesvat Istiggo to, eeslo 
j . _. 'eftoltsexss 

SSCl ,dL. yrsunst, beisb rsiisl es at ,censrvi" 
¢bisa colle yisseto9c 

odd, tedd ek nottsetebienes tnstiogmt teom eT! 

-9a sgmexo-xst Io aesm guiwotg sf¢ to sonesaixe 
xstive dein yLlomextxe ond ddiw belquoo ,esitinuo 
-rt9q 9yitb ot ebnst .wal yd boeogmt Ilisa eeser 
mt tesvnt of etom bas stom. smoont egret to anoe 
gited [fitte bons beveet aslitivoea iqmexs yl Lonw 
exotodston. bis aeltiisctoinum bas estste yd bevaal 
tiuect snT tnomarevon Lstsbe®. oft yd beveal 
trnomrresvep [ersbs@ oft to esunovex silt siegqmi of al 
to bsetant tact o8 ,sexstiive ot. tisvieq o¢ bas 
seftsx stsisgo ylineupezt yedct sunsver giteaisz 
-~9e sqmexs-xsi yilonw at tnemtesvit sgsiuoone oF 
floya to sweat ons epstuoome os aeve dns ,eeitiavo 
efat -eetsitsqtotinum bos estate yd. esisixruose 
edt mort ebaut. gnomseovnt trovib: ot ebnst ses00tc 
-ttocansis ,asaeliqretns evitoubo1rg to tnsmqolsoveb 
evitoubotanon o¢nt ,exftl ons bas ,pntavot ,molis 


157. 


or wasteful State or municipal expenditures, 

and forces both the Federal Government and those 
engaged in business and industry to compete with 
wholly tax-exempt issues, and on that account 

to pay higher rates of interest. 

'The greatest value of the full exemption 
from taxation arises, of course, from the exemp- 
tion it confers in respect to Federal income sur- 
taxes, and the constantly increasing volume of 
tax-free securities therefore constitutes a real 
menace to. the revenues of the Federal Government. 
At the same time it makes the high. surtaxes oper- 
ative as inducements to investment in nonproductive 
public indebtedness and is gradually destroying 
them as revenue producers, As a consequence the 
yield of the surtaxes.is dwindling and there is 
a premium on the issue of bonds of States and 
cities, In the last analysis this is at the 
expense of the Federal Government, and it is hav- 
ing a most unfortunate and farereaching effect 
upon the development of the whole country because 
of the. diversion of wealth from productive enter- 
prise. 

"In his message of December 6, 1921, President 
Harding said: 

'Many of us. belong to that school of thought 
which is hesitant about altering the fundamental 
law. I think our tax problems, the tendency of 
wealth to seek non-taxable investment, and the 
menacing increase of public debt, Federal, State 
and Municipal - all justify a proposal to change 
the Constitution so as to end the issue of non- 
taxable bonds. No action can change the status 
of the many billions outstanding, but we.can guard 
against future encouragement of capital's paralysis, 
while a halt in the growth. of public indebtedness 
would.be beneficial throughout. our whole land,.! 

"The Ways. and Means .Committee at. that time 
had before it a joint resolution for constitutional 
amendment introduced by Mr. McFadden authorizing 
the Federal Government and the several States to 
each tax the securities of the other to the same 
extent as it taxed its own, and several other 
resolutions having the same purpose. Subsequently 


ret 


,setmdtibnegxs Isqtotoum to siste Ivtetasw to 
seoit bus snomuteveD Lerobs% ond died seotot dns 
ditiw et¢eqmoo ot yiteaubat bus easnteud nt begsyne 

tewooos stadt no bas ,aeneet tqmexs=xst yilorw 
-tastetak to asts1 tengid ysq of 

motstamexe [fut ent to sulsv tastsets oT! 
-qmexes ont motl ,geitroo to ,eseits roittsxsd mort 
-tua emoont Letehbet of sosgest mi etetmoo ti noit 
to emwlov gntesstoni yLtnstanoo ont bug ,eexst 
Iset s astutitanoos etotetsst estifivose sett-xst 
tnemmtovod Istebet edt to esunsvet oft ot soanem 
-tego sexsiive dgid odd eaodsm tk omtt emse ont tA 
evitouborqnon ni tusmteoval ot etmemeonbnt as ovits 
gatyottesb ylfevhbstg ef ins eaonbstdebrt otidug 
ent sonmeupesiroo & eA eetsoubotq sunevet es nent 
et stedt bas gailbntwb afl esxetrue ont to blety 
“bas astst@ to ebmod to ‘eveet ont no muimetg s 
’ edt te ef alist ateylens tesl' sft nI  .esttio 
-vsti ef Sf bus ,tnemmrevop L[stohet elt to seneqxe 
tostts gritoset-tet brs stsnutiotay feom s gat 
geusosd yitnuoo eLlornw sot to tnsmqolsvsh sat noqu 
=tedme evitoubortd mort Asfeoew to Hokey th ons to 
-salig 

tnobteotd SOL .¢ zesdmeoed to egsesem ets are 
( tbise antbhisk 

teawont to Lootloe telt ot gnofed ax to Yall! 
fstnomsbnst ont aniiussis tuods tusiieesed ai dolsdw 
Yo yonebnet ett ,amefdotc xat tw0 Anindt I wwst 
ert brs toenteovet eldexst-nom asee of rtisew 
sista _Letebeil deb offduq to sasoront gniosnem 
eansdo. ot Isaoqotg & Yittau, fis - Isqtotnu bus 
-conm to sveat edt brie ot es of nottutitenod edt 
autste sdit sunsdo nso mottos olf -ebnod sidsxsd 
bisyg nso sw tud ,antbnuetetvo anofiiid yasm sdf To 
,efeylsrsq e'istiqso to snemoxsiveons erutut steniegs 
scenhavdsons ofidsg to atwotg ont at tied s ofidw 
' bust slorw two svondaucinds LIstoftened sd Hlyow 

emit Sadi ¢s settimmod engell bus eysW sit" 
{enottutitanoo tot mottuloasi tnuiot s ti ertoted bs 
guisitortus mebbsfiom .«xM yd Bheoubotint Jnembroms 
o¢ eestste Istevee edt bans tnemitsvop Istobet erit 
emse osnit ot tenho oft to asitiavose srt xed noses 
tonto [sitsvee buns .nwo ati boxst tf es Insixe 
yiinoupesadua -Seoctyg emse ont gntved anoituloaer 


158, 


hearings were had upon the resolutions and, it 
becoming apparent that a majority of the commit- 
tee favored the reporting of such a resolution, 
a subcommittee was appointéd to consider the 
form thereof. The resolution in the form 

now reported is a result of the work of this 
subcomnittee, aided by the Treasury experts, 
both legal and fiscal, and the Legislative Drafting 
Service. The form as now presented has been 
agreed to and is recommended by the Treasury 
Department, 

"It appeared from the hearings that the sub- 
ject had already been given careful consideration 
by various tax associations and tax experts, all 
of which concurred as to the necessity of such 
an amendment to the Constitution and in advising 
its speedy adoption. Among the associations that 
have taken such action are the National Tax Asso- 
ciation, composed of representatives from every 
State; the United States Chamber of Commerce; 
the National Association of Real Estate Boards; 
the American Farm Bureau Federation; the American 
Bconomic Association; the Investment Bankers' 
Association; the Farm Mortgage Bankers' Association; 
associations representing the public utility bus- 
iness; the New York State tax conference; the Peo- 
ples Reconstruction League; and the Ohio Tax Asso- 
ciation, 

"So far as is known to the committee all of 
the prominent authorities on the subject of tax- 
ation favor the amendment. The United States 
is the only one of the great nations that permits 
such a condition to exist. 

"In addition to these economic evils, tax 
exemptions create a grave danger to our social 
system and form of government. No principle 
of taxation is more generally accepted today than 
that taxes should, as a rule, be levied in accord- 
ance with ability to pay and all citizens should 
pay in the same manner. The present condition 
violates every rule based upon these principles, 
and while we seek to create, as far as possible, 
equality in taxation, we find that the Constitution 
makes it impossible. There should be no privi- 
leged class under our Government, but a special 
privilege is granted to those who invest in tax- 
exempt securities. This situation is the ground 
of just complaint and creates discontent and pre- 
judice against people of large means who use 


~8cl 
q 


ti (fs emottuloast oft noquy bad etew agnizsed 
-Simmoo odd to ytitotsm s tads tneitsqgqs snimooed 
fottuLoast s dove to anitroget oft betovat set 
eft stebtenos o¢ betntoqcs aasw ostsimmoodue s 
mrot ont mi moftufoest sdT .toetens mot | 

efnd to axvow oft to ¢iveot s ef hettoqet won 
.attsoxo yiwesstT oft yd bebis ,setifmmoodye 
ganttvtsi@ esvitseletgo. ett bus .[soati bas Isgel dtod 
need eat bhotmesstg wor es mrot 9aT .eofvise 
YwessttT ot yd bebnemmooss at bas ot bsetss 
é ' tnemtrs qed 

«dye oft tsit agnaitsed odd mort betseqqs tI* ; 
noitstebianoos Intetss nevig nsed ybsetis bed tos; 
ffs ,etroqxe xst bus enotsstooces xst evotisv yd 
- gowe to yStaceosn orit of es berzwonoo dotdw to 
gitetvbs nit boas nottiutitenod odd ot tnombnems rs 
tenot eanoltstooves sit anogk ~ .moliqobe ybeece efi 
-oesA xs? Isnoitsl ert ers nottos move nexst ovadd 
YIeve mort aevitssneestqest To heeoqmoo ,moitsio 
ssotemmod to redmsdd eetste besinU oft potate 
rebtsod etetei Ise To motistooaeA Isnolttsh ont 
nsoitemA edt  :nofistebst wee1vd sisi meofitsmA ot 
‘exoxunsd tnemteoval ont ynottstooeesA obronool 
:moitelocesA “etexnsd spsndtoli mref ont pmottelooeeA 
jweud ytiitty otidugq ext gntineesitqet enolistoosas 
-o9¢ sit sesonetotnos xsi eteta MxoY woll ond ;eaent 
~o8eA xsT off0 ond bre reugse Tl nottouttenosen esiq 
) ag »Mottsto 

to ffs settimmoo said ot mwont et as ist 08" 
-xsi to tostdue sit mo eettizotius snentimorg oxit 
estste betinU eat eSosubnems sid tovst nolts 
etinteq tsft snottsn tsstg ont to'eno vino ort et 
* etatxe ot moitibmoo s move 
xet,afive otmoncos eesdt o¢ mottibbs mI" 

fsiooe tno ot tognsh svetg s stseto ‘anotsamexe 
efqfonitg of .dnommisyog to mrot bas meveye 
nedtt yshot betqsoos ylisisneg etom eft mofisaxst to 
-btooos at betvel ed .efut's ea ,bivote eexst iscdt 
bivore emesttio [fs bus ysa ot ytifids tiv sons 
mnoftibnos ginsestq sdT -1Sftnesm omse ont ai ysq 
,esiqfomitg seedt mogy beasd elfur Yisvo eessLfoltr 
8fdteaog as Ist es ,stseto ot salese ow ofidw bus 
noitutitenod ent tent batt ow’ ,aoftexst af ytileupe 
-ivitq on od “biuode stent -oldfteeoqmi tf eouwsm 
{fsioece s sud ,tnemmisvod two today eeslo bezel 
-xst ai seovnt ondw seolt of botnsts af sgeliviitg 
bavoryz ett af notisuste aliT -esititvose somexe 
-sig bons tnesnooath astseiro bas srnislqmoo test to 
eeu ofw ansem sptsl to slqoeq tanisgs eolbut 


159. 


@ lawful method to lessen their taxes, Compar-~ 
isons are naturally made between certain parties 
who have a large income derived in whole or for 
the greater part from tax-exempt securities, 

and pay little or no income tax, and those who 
have only an income of moderate size derived from 
their personal exertions and, by reason of the 
present needs of our Government, are heavily 
taxed. A system that will permit one man 

to have exempt from taxation an income of 

$25,000 a year from securities which, possibly, 
he obtained by descent or devise, and which taxes 
heavily another man who, by his personal exer- 
tions, earns the same sum, is unfair and unjust, 
and when great estates largely consist of tax- 
exempt securities which pay no tax whatever the 
situation affords an opportunity for those who 
seek to attack our institutions. 

"The majority of the committee therefore found 
that the present system should be condemned for 
the following reasons: 

"(1) A large portion of property escapes 
taxation, thereby causing great less of revenue; 

"(2) It violates the ability principle of taxation 
and unfairly discriminates between taxpayers; 

"(3) It impedes private financing; 

"(4) It discourages investment in new enterprises; 

"(5) It encourages extravagance of governmental 
agencies; 

"(6) It grants a private subsidy to certain 
interests; 

"(7) By withdrawing money from private enter- 
prises it increases the rate of interest required 
for all enterprises not carried on by the Government 
and thereby adds to the cost of living; 

"(8) It creates social unrest; and that the 
only practical remedy was by constitutional amend-= 
ment such as is now proposed, 

"It will be observed that the form of amend- 
ment does not forbid the further issuance of tax- 
exempt securities, but merely permits their taxa- 
tion by the Federal Government on the one hand, 
provided it does not discriminate against secur- 
ities by the States or under their authority in 
favor of national securities, and that each State 


edt 


~Tsqnoo -eexss tiomt soaeel os bortem IutwsI 3 
eettisq aistis9 neewied obsm yiletism ets: enoet 
tot to slodw nt bevineb smoont ‘egtsi. s eved orw 
~aettiiwose tqmexe-xst mott ¢i1sq tetss7y ssit 
onw seeks boe.,.xst emoomt on to eltiiil yeq buns 
mort bevitsh esta etetebom to emoont as vino eved 
ems te moesst vd ,bas amotizexe Isnoe1sq tredt 
yiiveod ors ,cduemmievod wwe to abeen tineasig 
asm.emo tintsa ILiw tadt meteye A» .bexst 
to smoont ns moitsxst mort fqmoxe even cot 
Vidteeog .doidw eeistinuese mott tsey s 000,a8$ 
eoxss MSolidw bons ,egetveb to tmsoesb yd benisddo os 
etexs Isnoetesq aid yd ,odw asm tscitons ylivsed 
eteaugas bos tistay et .~mwe omee oft anrss -,enolt 
=xsi ito telanoo yflegisl estates tse1g nedw bas 
eds tovessdw xst on yaq Moidw esitirvose sqmexs 
oflw exodt tot ysinuttoqgo ms ebioits softtsuttea 
eenoltutitent wo Aossis ot aoese 

bruvot, etoteteds eotiinmoo odt to yttto¢sm sAT" 
tol benmebnoo od bhiwode mosveye tmeestq sot tadt 
ranoesset paiwollot ert 

eoqgsoes ydteqorg to noitroc satel A (L)" 
teunevet to aeel iserg anievso ydsteds ,noitsxst 

notisxst to.eigtonizq vttitde edd estsLotv tI (&)" 
,ateysqusd neowied aetsnimitoath yIttstny bras 
ygntionsatt etsving aebsqmt tI: (é)" 
;ecaliqtstne wen nb tnemsesvnt eepsivocetb gr (h)" 


isinemmirevog to sonsgevetixs eepetuoone tI (a)" 
-aslonegs. 

gistiso ot ybhtadya etsviitg s etnste tI ta)@ 
caesestsink 


-~tstne odeving mort yenom gniwetbst tw va “(nye 
betiupet ceetstal to etst oft esesstont $k aselac 
tnematsved eft yd mo betitsos tom eseirqtetns: ffs tot 
ipnivil to teoo ext ot webhbs ydersit brs 

ont ¢add bas ;taommm Istooe eeteeto ¢I (8)" 
~ Dire ms Lanoitud itenco, yd esw ybemot Lsottosiaq yiro 
.beeogote wom ef es dove snon 

~brems to mxrot edt send bevisedo ed Sitw si" 
-xst To somaueel tendiit odt bidtot tom asob tnom 
-sxst iulent asinisg ylorem tud .asitinqvose tqmexe 
Dost eto ect. mao tmesntevod IstebeT oft yd nots 
-isose tanisgs etsaimitoarb ton esob tt bebivorg 
ak ysinortus: riedd tobny. to estste@. srit) yd) aetst 
esteste cose Jet bans ,.setdrivoce [enotisan: to tovst 


160, 


on the other hand, is permitted to tax the secur- 
ities issued by the Federal Government, provided 
the State in levying the tax does not thereby dis- 
criminate in favor of securities issued by it or 
under its authority. In other words, the several 
States are given the same rights with reference 

to Federal securities that the National Government 
has with reference to the State securities," 

We endorse this proposal thoroughly and recom- 
mend that proper steps be taken to insure the support of 
the Washington members of both houses of Congress on 
this measure, 

15. SUGGESTIONS FOR A 
MODEL TAX SYSTiii: 

Your committee feels that the full intent of 
the legislative resolution under which it acts would 
hardly be complied with unless some suggestions were pres- 
ented relating to the development of the state's revenue 
system in the future. We venture, therefore, to submit 
a tentative outline of the line of development which, 
in our opinion, it would be well for the state to fol- 
low as the opportunity arises to make further developments 
in the revenue system. Some of these suggestions have 
been proposed in this report as changes which should be 


introduced without delay, if there is to be any progress 


in effecting amore equitable distribution of the tax 


.OoL 


“woes edt xsi of bodtimreq alt busi tsdto eft ro 
behivoig ,smosmteved LIsiehet st yd bevyaat aeiti 
-altb ydetedsi tom 2e0b .xst oft gntyvel al sista sdt 
to dioyd Souaat seitiwoea to tovst ni stentaito 
Istoveevedt),abtow, tedso aI... .ysinorius afi tebav 
sonetetet Atiw etoeinr omse ont nevip sis estate 
tnommrsvod Isnoitsi edd.tsdt esiiixvose Istoebet of 
"aeltikuvoge.etstia ont of sonetstet Atiw esci 


-009% bas yldguotods. fseogorq aftat sex%obne eW ) 
to ¢xoqque ost event of nonted ed egete t9qoig tsit boom 
" 0 aetgm0d to eeauod dtod to, erodmem fotgninesw edt 


" s@auessm atidt 


tordnedni Livt ot tert aloet sstttamoo twoY 
| biuow etos tk dotiiw robas nokistosex evitsleigel ont 
-e89Tg 219 anotd pengus, moa eeeinn tlw boifonmos ed ylbresdt 
eunevet atetsde edt to ¢nemgofeveb ont of gattelor besne 
jsanen 68 ~etotesvedd ,siudnev oW  .eisul odd mi moteye 
Moidw taomgofeveb .to sail ont to ent lise evitsinet s 
~{fot ot etsta odd tot Ifow ed bluow st ,motmtqo io ni 
etnomgoloved resid ts exsm of egaiis ytiaustoqgqo ent es wol 
sve, anoiteesnua seodt To smoe . ide Seve (Wand re4 edt ai 
‘od biuoie -dotcw sepmatto as drocet gict Pigs Pe a freed 
aeetgotg yns ed of af estedt Ti .yelob tyoctiw beouborsnt 


xet oft to mottudinde tb eldstiups stom s unttoette at 


161. 


burden. Perhaps the most important of these is the re- 
organization of the system of administration which we 
have made the central feature of this report. 

The basis of the state's revenue system will 
continue to be, as it has always been, the property tax. 
We have presented in this report the evidence to show 
the present relative importance of the property tax, and 
we are unable to foresee the time when the general econ- 
omic conditions which now prevail in this state will have 
so changed as to occasion the development of other sources 
of revenue of greater importance. We reiterate here the 
point which we have already emphasized, namely, that the 
outstanding importance of the property tax gives great sig- 
nificance to the problem of its efficient and equitable 
administration. A modern state tax department,or tax 
commission, will therefore be the head and center of the 
state's taxation system, in the future, as it should be at 
present. 

We are not satisfied, however, to accept the 
narrow, illogical, and unwarrantable definition of prop- 


erty which the legislature devised in the act of 1907, 


fol 


-9% ond et sacs to tasttogme - ‘$ eent was “egadeet «fe bts 
ew sioksiw nolterteintabs to niedaye ont to. noktasiney xo 
; .dtoget a ksit 't6 o1tast Letines ont Sbsat even 

ifiw metaye ounevat etotsta sit To etasd oT 
xed yd tecote a eed eyswie esc ti as ed ot eumitssoo 
 wosla o¢ sonebive exit ‘troget eidt at betneasse overt ow 
bas ,xst yszeqorg edit to sonst togmt evissior ‘tneaeic osit 
«moose Isienen sit notw omtt edt seestot of elders sis ow 
even Ifiw otste eict at Lisveiq won doltiw emolsibnoa olmo 
esotvoe tenito to tnemgofeveb sdt mofleasoso ot as Raauacts ce 
edt otedi stistes ior aW sonstrogm: tetssss to sunsver to 
edt tsdt vlemen -bostestigme ybsetis oved ow Wo tite intog 
a5ie tS97%3B aevis xst ytteqoiq exit to sonst todmt gntbastetuo 
eldstiups bus dnetottte etf to meldorg edd of eonsottin 
xsi to,tnsmiirsqob kad atete nto bom A toltsiteinimbs 
est to tetmeo bns bsed odd ed exoterosit ifiw »folea times 
$s ed bilyotle ti as oie ut ent mt eni9 Ye nottexst alodate 
. . _stnesesg 

sai tqooos oft _tevewor beitettse ton ets oW 
-qotq to notsinited eldetusatswas bis  isotyoflt WOTTEE 


.YO@Ll to gos offs at beatveb etuteletses ont dotcw ytre 


162. 


and which was sustained and approved by the Supreme Court 
in State ex rel, Wolfe vs. Parmenter, 50 Wash., 363. 

We have criticised this view at length in our report. 

We believe that this error must be corrected, and that 
the constitution should be so amended as to accomplish 
not only this result, but to make possible the introduct- 
ion of the principle of classification of property for 
purposes of taxation. We approve the model constitu- 
tional provision on taxation which has been prepared and 
recommended by the National Tax Association. This vro- 
vision is as follows: 

"The power of taxation shall never be sus- 

pended, surrendered, or contracted away. All 
taxes shall be uniform upon the same class of 
property within the territorial limits of the au- 
thority levying the tax, and shall be levied and 
collected for public purposes only." 
(Proceedings of the Fifth 
Annual Conference of the 
National Tax Association, 
1911, n.+45a-) 

Such a section provides the necessary constitu- 
tional safeguards against unjust taxation and against the 
improper use of the taxing power, while it leaves to the 
legislature the full responsibility for the actual form 
of the taxation system, with complete freedom to change, 


adjust and adept this form as changing conditions may 


SOL 


giv0d emesitque eft yd bevorgqqs bas benistase asw doidw brs 
696 ,.cesW OC ,zetnomist .ev stfow ,for x9 stste at 
»ttoget two of mignel ss wetv eidt beafotitio eysd eW 
tedt bas ,betosttoo ed teum torre elds tsht svetiled eW 
seifqmooos ot a8 bebmems o« sd hiuote moitytivanco sit 
-soubotini odd? eidteaog exsm ot tud ,tivest etdt vino son 
tol ystteqotq to noitssiiteasi[o to siqtontiq ent to not 
~uSiJ ato Isbom ont svozggs oW ..moistsxst To esaoqing 
bos. beisgeig need est dotdw soltsxst no nofefvota Isnotit 
~otq afsT enoistsfooseA xsT Isnoitsi edt yd bebnmenmmoset — 
rete 43 . gawolfot as ef noleiv 
~-ave od teven {iste nottsxat to 19wog enT® 
IfA .vews betosiinos to ,bexrsbaertrve . dbebasg 
to easlo omse oft mnogu omotinu od Ifsdte esxss 
-us oft to etimfil f[etrotixzies edd aidtiw yitsqorg 
bas beivel - on liste bas .,xet ent gatyvel ytitodt 
"  yino eoaoctug sites ‘tot Betos [loo 
HtUT oct to egutbssoorg) eee 
oft to sometetnod Lseunma | 
soit sioosed xsT Isnotist 
(.62 sqoellOL 
-utitamoo ytseesoen esd esbivotq noltose s cone . +33 
edit tenisgs bans nottsxst seujuu tenisgs ebtsugotsa Isaois 
eft ot eovsel tk oefidw ,1teswog guixsi ont to. oey reqotcmt 
mrot Isugos,ocs rot ysilidkamocges1 [fut edt otutsleigel 
Speco. otf mobestt stefqmoo dtiw ,modaya sottsxst odd to 


yen anoigibnoo grigmendo as miot sidt ¢qobs bus teuibs 


163. 


require. 

We propose, also, for the future as for the pres- 
ent, a vastly improved inheritance tax. We have recom- 
mended an immediate change in the brackets to which the 
present schedule of rates is applied, and the reform in 
the administration of this tax. We advise that the legis- 
lature study with care the model inheritance tax law 
drafted and recommended by the National Tax Association, 
with a view to promoting a uniform interstate policy of 
inheritance taxation. 

(See proceedings of the Fourth 
Annual Conference of the National 
Tax Association, 1910, p. 279.) 

We repeat also our suggestion that all proper 
influence be used upon our members of Congress to secure 
the relinquishment of the inheritance tax by the federal 
government, in favor of the states. The latter have far 
greater need for.the revenue; they do not have the other 
vast resources of taxation which the federal government 
enjoys; and since the whole process of administering es- 
tates is conducted under the state law and by state and 
local authorities, the full right to this tax should be 


relinquished to the states, 


' ,60L 


.otiupet 

-estg ot tot es euusi ont tot -oels ,ssoqorg sw 
-moost éveil 5W ‘.xed eonstitedat bevoromt yftesv a {ime 
ens dolinw ot atexvosrd ent rk eannsco ste ibomut ne bebron 
at mrotert edt bus ,betiqqs at estat to eluberoc tnesetq 
eetnel oft sect egivbs 6W uxet etd? Yo nottsatdetaimbs add 
wel xed sonstixerdakt Iebom oft s1so dtiw thite exudes 
motstetooseA xsT fsnoiselt edt yo bebnenmooet bis bestsexb 
“to yotlog etssetedal umotins s gntt omorg ot wotv 8 sitiw 
| wnottexsd sonst itosdat 

trol sit to egntbesootg 992) » . 

fsnoitsli ols to sonetstmod Ieunns eral 

(.e%S -q ,OL@L ,moitstooesa xsT 

toqotq Lis tadd noisesggue iu0 oels tsedet ew, 
eiyose oF eeetgmo0 To eteduisn xtW0 mogy beeu-ed eonoultni 
Istsbet sat yd xsi eonstitenat sft to tnomfleituprifer sxcit 
st ota 48$S8T eat + vere edt to tovst nf ,daomnrevog 
tease oandt evsd' tom ob yesdt ;esunevet oft tot boon tosseig 
dnommtevog Lstshot sdd doldw mnottsxst to esorvoset sesv 
-89 yniredarntmbe to eessorq Slow ond oonte bas tayo 
bas “6+sf8 vd bas wsl osste odt tobaw bstoubaoo at ests 
ed bluote xat etdt of sdata Ifut odd ,eottizodtus Isool 
.estste ond of bocetupaifer 


164. 


It is a truism in public finance that the form 
of any state's revenue system should be adapted freely to 
the character of the wealth and the tax paying capacity of 
the people of that state. For this reason we have re- 
commended the removal of the constitutional hindrances 
to the development of a greater degree of elasticity in 
the revenue system. In accordance with this principle 
we suggest two new forms of taxation which offer possi- 
bilities for the future since they do not take account 
of the peculiar character of the state's resources and 
of the distribution of wealth within the state. 

The first of these is a production tax upon 
the quantity of such natural resources as lumber, coal and 
other mining products, fish, and other commodities which 
constitute so large a part of the state's original wealth. 
In Louisiana such taxes are called "severance" taxes, and 
are levied upon those who are engaged in the business of 
securing natural resources from the soil or water. We 
shall not attempt here a detailed outline of such a system 
of taxes for this state, but we do believe that the princi- 
ple is sound, and that such a tax would be eminently prac- 


tical, as well as satisfactorily productive. 


» 


dL 


oot eft tsodt sonsntt offdyq mit maturt s ef SI 
ot YLleett besqebs od Hivorte meteye eunevet e’etstea yas to 
to Ysiosqso aitysq xsd sit bos détsew ont to tefosreno ont 
-st ovsd ew coasot eit rot  .otste tedt to efqosa sit 
agoristbnid Lavoksuditencs edt to Isvomer edt bebromnoo 
mi yttottaafs to getgeb “tetss1g s to tnemeofeveb ont ot 
elatonti atid syiw sonsbto00s oI .meteye eucovet sat 
-f2aao, tstto dotdw nottexss to emrot wea owt seoggue ow 
tnyosos oist fot ob yeds eonie otutut off Tot eeltilid 
bos asotoeet atetste eft to retosetsado tetiuos¢ sit to 
.otste ea3 atdtiw fifsew To noitudittetb edt to 

“nocu ‘xs¢ moktsubotd s et seed to tatit eft 
bis Isoo ,tedmul es esorvoeet Istitsn Move to ytistnsup ont 
dotcw aetsibommos tedto bas ,dett ,atouboxq gntnim testo 
.itisew Ienisito e'eiste edt to ttsq s ogtsl oe etustsennoo 
“bos ,eexst "eonstevee" belies sie eexad Move snstetsol al 
to eeontenud sit nt Bbegsenne sts ow seodt nocu betvel sts 
ew .rdtew to Ltoe edd mort aeotwotor Iatudsm goinose 
mataye se foue to entitue befisteh s sted sqmetis ton Liste 
etonitg eft tat svetfed ob 5w tud ,stete ett tot eexst to 
-oftg Yltnentms ed biittw xst s Move tens bas ,basoe at siq 


.oevitoubotg yltrotostaisse es IfLew'es ,Ledtt 


165. 


Several states are now making use of such a tax, 
and it is proving to be a productive source of revenue, as well 
as a fairly simple tax to administer. 

(See George Vaughn - The Severance 
Tax, Bul. of National Tax Assn., 
May, 1922.) 

The second new source of revenue we suggest is 
a series of local business license or occupation taxes. 

Our discussion of general income and sales taxes 
in this report has presented the grounds upon which we have 
hesitated to recommend immediate adoption of such taxes on 
a stateewide basis. The concentration of wealth, popu- 
lation and business activity into the larger cities of the 
state, and the very large area gutside of these urban centers 
which has little population and a small volume of taxable 
wealth or income, were factors which influenced our decis- 
ion. Since the revenue problem is probably most acute in 
the cities, their case could be met by the development, 
within the municipality, of local business license or occu- 
pation taxes. 

The use of such taxes would involve a rather care- 
ful survey of the local situation, but it is epparent that 


each city would have here a tax that would be productive, 


cdl 


ae 8 oye To 9au gninoien won 97s oeense Lfstsvee8 
Ilew es  SUROVSE to gotvoa avitouborg 8 od ot gaivorg af + F brs 
) _ »teteinimbs ot <3 giqute. Virkst 8 88, 
gonstevee ait - pi ee eg%0ep 998) 


, Meek xst Lsrotis To! .fIwei .xst 
(.SS@L . ysl ; Pave 
ef teeagua ow 9NI9vO% 0 sotvoa wes bnoose ont 
Boxed nottsques0 zo danacks asentaud fssof to notes 8 


oi 


aexat setae Sas omoont fstone3 to note sue tb 110 


Lope 


“? 


oven ow ako btn moss abaworg ont betneassq. asd ttoget etdy mi. 
fo aexsd stosre io aolitgqobs od otbouunt srremni990% oF begesteod 
-~uUgoc dd isow to nokt sx#no0%09 oat e8liesd obiw-esste 3. 
edt To eottto reyral odd otat yiivitoe esents aud, bus sofisl 
atedines nsdn sacdd to obiadss s9ts sgisl Ytev eat bos, YR Sig 
oldsxst ‘to omuLov fisme s bas agiielugeg ofstit asil flo itchy 
-2afoob tio beonsu lta dofsw atotos 32 o70W ,onoont 79 dtfsow 
ak etuos seom Ydadorg at metdorg ommevet edt sonia | .moi. 
, doamqoLoved edt yd tom od bLuoo gaso slot ingiito, ait 
~u990 10 agregts eeonteud rages to ti Leqto tna ont EAS tw 
| ; .2exet sokiag 

-9189 renter ‘8 evlovat bluow asxst foxe to gay osT 
tontt ‘tnetsqgs af ti tud otssudte ts90L odd to Xeviwe ft 


ovitouborg ad biuow ans xst s ord eva biuow ysio floss | 


166. 


and at the same time one the incidence of which would not 
be inequitable. The basis of such a tax could be either 
gross earnings or net income, or the tax could be imposed 
at a series of flat rates, the amounts of which were varied 
eccording to the nature and scope of different businesses. 
The flat tax could be used for all concerns doing less than 
@ minimum volume of business, and the graduated taxes on 
earnings could be used above this point. Eventually, when 
the development of the state's population, resources and 
income power has reached a level which would warrant its 
use, a state-wide income tax should be introduced. The 
income tax is doubtless the most equitable form of taxation 
for the purpose of supplementing the property tax, but as 
we have indicated in the report, it is doubtful if the time 
has yet arrived for the introduction of such a tax, 

When the principle of taxing persons according 
to their ability is introduced through. the personal income 
tax, the state's revenue system should be rounded out by 
the use of a business tax on the net income received by all 
business concerns from business done within the state. 

The main features of the state's taxation system, in ad- 
dition to the improvements already suggested, would then 


be the following: 


-,98L 


tox bivow slo E.siw to sangee eee oat So omit enise ed ts Ons 
nodtte od bLwoo xst 8 dowe to atead oft “s0ldad tupeat sd 
ae soqut ed bLluoo xed ont 19 ,onoont ton To agnintss 22a0ts 
petisy erow Mofsw To adnvome eit ,setst Saft to estitea s ts 
gage ental dno rattib to egooe bas siuten edt o¢ antbto00s 
nactt eesl gatob amisomoo IIs 10% bean od bIluoo xst salt oat 
mo axe? betaubs73 oct bas , seen tens to aml ov pick ryt te s 
mechr -Uleutnevit .tntog atas evods boas ed biyoo Bo arty 
bas agotvosst idetae Dabee a'siste ent to tnomgo Loves ant 
agt tnsatisw biyow doidw Level . 8 borfoset ast ewer ‘emooat 
eat -beouborsat ad bLsorle xsd emoont sh bwend ote. a (98u 
noitexsd to amo? oa ae $2 om eft eeslsdyob ef xst enoort 
2 2s tud per yireqorg ent anidnemelqque to (S20qtug oxft tot 
omtt ails tt Iuttdurob ai ti ,ttoqet oat mi betsotbnt eved ow 
.xst & tloxe To noktoubox tat sdi ot bevizis gah Re aed 

i ny aoe tod gnixst to elgtontte edit nodW 
eméout Lindeteg eit . digveiuit arent: ad ystitids thot ot 
yd tyo bebnuot od biyore metaye ounever elodsta oxft exst 
{ffs yd bevisoot entoont gon ont mo xst aaentend s to 9eu acd 
esate ent mintiw emob esontaud mort amtsonos easniaud 
-5s mi madeye notisxss atotste edit to eetutsot aiem onT 
rrocit bLisow betasgsgue ybsetis adnonev otgmt eit of mottib 


:gartwollot exe od 


167. 


First; The taxation of property located within the 
state, with a differentiation of intangibles to be taxed 
at a low flat rate. The principle of taxation.accord- 
ing to benefits received requires that property be taxed 
proportionately to its vaiue, with a reasonable use of 
classification of forms of property. 

Second; The taxation of persons according to their 
ability to pay. This would be accomplished under the 
income tax, which would be levied on the individual's 
total net income from all sources. The income tax should 
be a graduated, or progressive tax, since ability increases 
faster than incomes, and the personal deduction shoulda” be 
low, in order to secure the widest possible diffusion of 
the tax. 

Third: The taxation of business concerns doing business 
within the state on their net incomes from such business, 
Such .a tax would be a business tax, not an income tax, 
and its basis would be the net business income. Such a 
tax should, therefore, be uniform rather than graduated. 

We do not undertake to outline all of the changes 
in the existing tax laws which these suggestions would en- 
tail. In this outline of a taxation system which the state 


might to seek to advance we have had in mind the model tax system 


- TOL 


eft aid¢viw botsool ytisqotq to moitsxst oft :tetlT 
boxs¢ ad o¢ aeldtgnesnt to nottsidnets TItb 8 agiw Dr etcy | 
-br0098 notisxsé to elebosben oi? ote salt wol 8 ts 
boxst od ytiegorg dss aetivpst bevteost a ttoned og gat 
to oau eldsnoase a dtiw ,suisv att o¢ vletanottrogorg 
“witeqozg to emtot to nobisoitbaaslo 

«todd of aithtooos amoatsg to. nottexst oT :bm0098 , 
oiit sebny bodatiqmooss ad biuow eka “ver of qwitids 
e'Lawbtv tbat ont m0 botvel ed bivow ‘tho betw Coad sane 
biuyode xat smoont oAT .2007u08 fils mort emoont tour fstot 
esesotont utilids eonte .xad eviesstaote 0 : be sambars 8 od 
ed biome sotsoubeb Lesoatsq edt bas < somoont ‘Manis retest 
to nokauttth 9idtaeog saobiw ont ersoge ot bahrebd at wo 

; xed ont 
aegnieud ganiob aseeeeae asenteud to aotisxsd oT Duk } 
.eeenieud dove mort eemoont son ated} fro otasat elt nists tw 
xed emoont as gon .xst 22 en Saar s od biuow xat 8 slowe 
s doug ,emoont e: Lonteud ten oft od bisow elasd ett bas 
eDstsyb5s13 ‘sedt tedist mrotins sd store toss ebLivoda nat 
eegasdo edt to [fs satituo o¢ aisirebas som ob sW , 

-19 bluow anottaesgue seedt dotdw awsl cabs aniteixe odd at 
etsta edt doth mesaye nobtaxet s to ontisuo aint ar »fiss 


meteye xst Pe 5m edit baim at bed sved aw sonsvbs ot asee of tog tim 


168. 


for state and local governments which has been prepared by 
the National Tax Association. It may be that future 
developments in this state will never be such as to warrant 
the full application of this program, but we know of no 
better or wiser program which might be held up as a model 
revenue system, toward which the state might seek to advance 


as the trend of circumstances werrented. 


Respectfully submitted, 
(Signed) (Signed) 


REEVES AYLMORE, JR. NATHAN ECKSTEIN 
Secretery. Chairman. 


W. W. ROBERTSON 


DW. TWOHY 


I hereby certify that 
the foregoing is a true and 
correct copy (with the ex- STEPHEN, By L. PENROSE 
ception of two charts - pp. 
20 and 90) of the original 
report filed with the 
Governor, July 1, 1922. PETUR McGREGOR 


a) 


y, & ; ; 
KL O(a CVAG roa 
Secretary. / 


; ALEX POLSON 
tPA 


GEO. MM. ELLIOTT 


FRANK D. OAKLEY 


ROBERT H, HARLIN 


.8dL 


yd beteqetg need asd doidw atnomatevog Isool bas otsta tot 
siutut tedt ed ys +I?’ .mottatooasaA xsT Ismottst ods 
dnstiaw of as mova ed toven [fiw stata etdd mt atnemqoLlovsh 
om to woud ow tud .margotg ett to mottscilgas LLut ont 
febom s as qu bled od togtm dotdw mergoty toatw to todited 
gonsvbs ot wosa tdagim otste ont Motdw brswot ,mosaye ourevet 


.betnstisw aeonstamyorto to brers oft es 


Settindye y[luttoogqeon 


(bens £8) 3 (beng ta) 
UlATeNoe VANTAU bt AU LIYA & 
' .famriedo ‘ apy’ Bay: ~YtIssstose 


“OeTHESOA WW 


YHOWT .W 2 


tsdt ytittes ydeted I 
‘bas ovtt s at gnfogetot ot 
HeOnMeT I .& WoHIere -x9 ont dtiw) yqoo tooxtoo 
' se -qq ~ asttseno owl To motiqss 
. . fsatytto edt to (0@ bus OS 
reer ; ; sdi dttw beLltt troqget 
AQOTADOM ACTET SSCL .f yLyl ,.tomtevoD 


~~ 


YORTOY XALTA \ 
. oF PIAKK MAAS 


\., eYtststoss 


TTOLLI ».M .O0fD 
YaTAAO .C WARE 


MLIAAR .H TASHOR 


Total Regis- Rec'd by Rec'd by 
County Vote tration State County 

Adams 2,540 2,547 13,936.00 3, 484,00 
Asotin 1, 962, 2,254 7,344.00 1,836.00 
Benton 3,929 4,492 13, 236,00 3,309.00 
Chelan 6,821 7,393 35,124.00 8,781.00 
Clallam 3,638 3,764 18 , 028,00 4,507.00 
Clarke 9,641 11,271 46,388,00 11,597.90 
Columbia 2,206 2,750 9,888.00 2,472.00 
Cowlitz 3,883 4,608 17,560.00 4,390,090 
Douglas 2,810 3,226 13,044,090 3,261,00 
Ferry 1,433 1,622 4,732.00 1,183,900 
Franklin 1,952 2,295 11, 424,00 2,856,00 
Garfield 1,350 1,380 6,502,00 1,575.00 
Grant 2,449 2,550 10,696,00 2,674,900 
Grays Harbor 12,322 14,734 80,520.00 20,080.00 
Island 1,806 1,817 6, 764,00 1,691,900 
Jefferson 1,977 2,905 9,824,00 2,456,00 
King 113,065 145,981 577,356.00 144,339.00 
Kitsap 10,362 ©°12,181 40,876.00 10,219.00 
Kittitas 5,548 6,113 28,946,090 7,236,900 
Klickitat 2,947 3,436 14,180,90 3,545,090 
Lewis 11,614 12,902 50,862,090 12,715.00 
Mason 1,868 2,121 ' 8,272,00 2,068.00 
Lincoln 4,787 5,911 23,032.00 5,758,900 
Okanogan 5,278 §,811 22,4352,00 5, 608,00 
Pacific 4,179 4,682 25,204.00 6, 301,00 
Pend Oreille 2,066 2,427 12,972.00 3,243,090 
Pierce 44,027 53,609 202,252.00 50, 563,00 
San Juan 1,327 1,615 4,592.90 1,148.00 
Skagit 10,9021: 13,081 47, 388,00 11,847.00 
Skamania 810 961 3,812.00 953.00 
Snohomish 21,147 24,704 96,860.00 24,215,000 
Spokane 44,194 44,540 226,320.00 56,580.00 
Stevens 6,105 7,523 27,036.00 6,759.90 
Thurston 7,641 8,871 35,076.00 8,769,090 
Wahkiakum , 873 941 4,532,900 1,133,900 
Walla Walla 9,014 10,653 40, 916,00 10,229,900 
What com 16,405 18,886 70,444.00  17,611,00 
Whitmen 10,075 11,000 51,664,000 12,916,00 
Yakima 19,945 _24,267 _ 91,968.00 _22,992,00 
TOTALS 414,691 490,824 2,011,602.00 502,899.00 
Amount Poll Tax collected in State to Feb, 28, 1922 
Number registered, 490,824 @ $5.00 
Number paid in excess of Registration, 12,076 @ $5,900 
Number registered November, 1920 490,824 97 6% 
Number not registered " 12,076 2.4 
Number collected from 502,900 100% 


POLL TAX DATA AND RECEIPTS 


To February 28, 1922, 


Total 


17; 420,00 
9,180.00 
16,545.00 
43,905.90 
22,535.00 
57, 985,00 
12,360,00 
21,950.00 
16,305.00 
5,915.00 
14,280.00 
7,877.00 
13, 370,00 
100, 400,00 
8,455.00 
12, 280,90 
721, 595,00 
51,095.00 
36,182.00 
17,725.00 
63,577.00 
10, 340,00 
28,790.00 
28,040.00 
31,505,00 
16,215.00 
252,815.00 
5,740.00 
59, 235,00 
4,765, 00 
121 ,075,00 
282,900.00 
33, 795,00 
43,845.00 
5, 665,00 
51,145.00 
88,055.00 
64,580,00 
114,960, 


2,514,501.90 
2,514,501,00 


2,454,120,00 


60, 361.00 


Les ot 


00,088, vs 
00, O61, 2 
CO,éhE OL 
00. 308,08 
60, d6€,S8 - 


00, 600, {8° 
00,880, £4 
CO, 86£, 86 
00, a8F, FL 
OO, TYE .c8 
OC. ,Od€ OL 
00,0e7 ,88 
M.080, 95 
00,808, £6 
00,618, aL 

- 00.2816, S48 
OC OST, é 
00, aéS., a 
00,@87,3  . 
OC E90 , ISL 
00,006 ,S8s 
GO, Ge° sé 
00.083 ,o2 
00,888 .2 
00,a81f . [8 
00,866, 88 
CO, 082 £0 
OBE DLS x 


00, 106, ,a528,8 


00. £02, ara, 8 
vs er. 
C0. OSL acd. 8 


00,686,008 


yo. B' oak 
__yenued 
C0 $88 .,5 
00. 688,.L...: 
00, C0 .& 


OQ eL80,,8 


0O.%0d > 


- WO. PCB LL. 


00 STs. s 


; OC ,O@E A 


00, £88 .é 


00,086 DAL 
00, GL8,0f 
QO, BEST 
06,8. . 
OG, 8LV,SL 
00,830,S 


00, 860.4 ‘, 


0¢,.603,8 
00 L083 
00, 888,6 
00.. 688, 08 
00, &£,i 
OO; Ves IL 
09,c&@ 
00,858, 458, 
06, 08¢ , 3 
OG, 29,3 
00, @at.6 
OO 665, £ 
00, C&S, OL 
00, £10.92 
06,8aL8,. Sf 
OO.S8E. SE 


OTINOMA CHA ATA KAT MOT | 


S800 


Yo boon 
ow ESE 


Oo eteter 


00, bdE 


“00,688, 6f 


C6,688,0fL 


OOF OSE , O8 
00, 48%,5 
OO ,PSE,e 
OC ,@8& , TTa 
00, af8 6a 


06,986, 88 - 


00, O84 OL 
OC, 888.08 
CO,S%S,3 © 
OO, S60 ,eS 
00.884 .S8 
00,608, #8 
00,896 Sr 
00, 888,508 
00,808 a 
00,688 , 7 
00,8I8,é 
00,086, 29 
00.086 , 83S 
0O.860,78 
00,876 ,3e 
00, S60, > 
00,8L0 , oO 


00,80, [4 
00, BAB Le 


. meray 


T OE, Se" 
SEs eh 
ive, 8 ' 


 —eipek lasek 


) metters  etov 
eee Soa 


8 


bOT,Sh- 


rhe 
64a, 01 
ba8, SL 
000,55 
NOS bS_ 


a" rin pee Ll 


00.88, S08 O0,S0R,t10,8 aS6,OCF 106, mee 


SkeL ,8S-, det ot stat&G mb betvelloo eT [lot sieoms 
Vegey 00,48 @ 685,00) ,betetvoltges todeua 
00,48 @ OVO,SL ,molvexteigeh to aseote mi biaq tedmen 


PSH, 008 
ato Sf 
' C0, 0 


OSeL ,redmov on boretstyoe todmylt 


" petetainss ton xodmaif 
mort betoeltloo tedmyik 


BOND ISSUES BY COUNTIES & MUNICIPALITIES 1920 & 1921 
COMPILED FRON ANNUAL REPORTS ON FILE IN DIVISION MUNICIPAL CORPORATIONS 


BONDS ISSUED Year of 1920 Year of 1921 Tétal 
By Counties; 
School 3, 754,970.00 4,678, 450,00 8,413, 420,00 
County Road Construct- 
ion 3,846, 636.,00 3,738,870.00 7,585 ,506.00 
Donahue Roads 3,511,150,00 860,250.00 4,371,400,.00 
County General 451,000.00 235,000.00 686,000,00 
Dike Districts 195,000.00 ‘213,500.00 408 ,500.00 
Waterways 77,000.00 91,600.00 168 ,600.00 
Port Districts 1,698,500,00 1,547,900.00 3,246, 400,00 
Irrigation Districts 1,218 ,350,.00 194,400.00 1, 412,750.00 
Drainage Districts 140,600,00 254,300.00 394,900.00 
TOTALS - Counties 14,873,206,00 11,814,270,00 26,687,476,00 
By Municipalities; 
Taxation Bonds 1,556, 469,99 1,090,600.,00 2,647,069,00 
Revenue 802,700.00 6,507,500,00 7,110,000.00 


Local Improvement Dists 10,961,642,32 10,457,589.16 21,419,231, 48 


TOTALS - Municipalities 13,320,812,31 17,855,489,16 31,176,501,47 


GRAND TOTALS - Counties & 
Municipalities 28 194,018,351 29,669,759,16 57,865,777,47 


Note; Report from Garfield County for 1921 not yet on file at 5-17-22. 
‘e " Towns of Ilwaco, Sunnyside, Goldendale, Kalama, 
Waterville, Wapato, Grandview, Edmonds, Winlock, 
Ridgefield, Prescott, Snoqualmie & Selah not on 
file at 5-17-22, 


>. ’ a, Hy : “ORE 


IS@L % OSeL eXI TLUATLOIMUM & BELTHVOO Ya eMVEBE CUOM uae 
MOL TARCAAOO FALTOLAUM “OLETVEC UI BITT MO BTROTER IATHMA MORE TE IEIMOD 


hs: daget ______s8et 39 anex fiber to x 


00,088 12,8 00,083, 873s - Ae 5 : Loodoe 


~touravented beot yomsod 
00,.800,d88,0  CO,078, 867.6 00.053, 808,8 . ok 
QO.0Od.{VE.s 00,048,088 OO.08L ILa.€ | "aboot sudtanod 
‘00.000 ,888 60,000, 48S 00.000,f8a ~ ned ysnrod 
00,008 , 202 00,004,618" 00,000,6ef titeld ekig | 
00,008,881 99.008, £€ 00.000. 09 BY erred > 
00,003 ,.30S,5  00,000."h8,f°  00.008,88a,£ sted drot 
+ coat. SLd,f 00,002, 62 00,086 , B18. 5 atointa a0 ee a 
bo’ Gom bee 00,008, 24S 09.008, OAL to kat i iokect “ 
Be PRADA GE 00,098 ,.d£8 64 20,008,E78.0S md - BIATOR 
| Sesion: ah a reektiLeghotowih yet 
00,.@20,003,5  O00,008,000,£ . @e, one Let a By of mottaxat 
00.000.0fL.", 00,008,708, 00.007 S08 ounevem 
Bb LES CLS LS 8L. 088. Tas OF SE.Sh3, Lae. of eteia seiner orc tesod — 
Th. LOE STL LE  OL,09> 838. 8L £6. S68, 088,645 netstat teunt - aIATOP 
; . % acidnuoy = aTATO? GUARD. 
TE NNT. 60S, T2 Of e820, €08 08 oS dettiisgtoiam 
a "aNe wn ee - t iC" yeh ee « 
4 i . Fils Ase, 4 
3 rant > hal 
oy ae 


te hy 
So-T1<8, te eLtt Wo soy, tom ISL tok vine ALottrsed mort. d0qon sod 
,emsisdh# ,e@feboeblod ,ebisynavé ,coawll to snweT 
Aoolaie ‘ abr: ombi wotvbnety otece® ~olfivireisy (.- - 
mo ton ts fo8 3 Samenncod Cees: , Ofettexybtis ‘ 
SV I @ te efit 


’ 
OS OS WPS OGY 
DO MIAN INH OOS 
. * 6 > ¢ a | 


at 


fy yt Ie, 


4 kn de a i. ae as ae eS eee eee 
Seen te ee cee 
7 —- —¥ Se ee ee I oo 


al 


a 7 Z “ ~ Se a. Ta) ae * . * * 
LE SES RR ESD OO © We Tt COO ge oe ee at 
} ON ied OF SRD ITN UN EA ay 5555 Gea @ S 

-_ > “2 SU Ses UPS FY 


Fat] F 
MmeataaeeQises BSE e® 


YAO 


o 20 ee2 FF SF HS SSSCHOOCEOO 
o fy - - : ss he Se the te oe Ee 
uy My iO OO ONO ot NOOSE LOO OD OD © HI OSE St) Se a 
aon MAHA AARAHACOSCCTCOOV Sees AI 
i @ SOO CO 0D CO DIED Gry Dts Gy Dy GT eh AGS Oe D> Fo OF Gy Gy + 
a mete veel ets rte ta ate ett ae ae 


§ 


o 


EL20 Set 


4 


igs: 
Computed 

0 

0 

9 

0 

0 

0 

Q 

.9 

oO S$er.0 


Q2 C¢L40 OSu8u 


i 
fy 
“A 
oO 
ve 
we 
uJ 


T2 GoMle eteaocsus GATATa AOL 
gisd “tO y - toll 

2 
3 
4 
4, 
ae 

@ @ 

) Fs 

¥.00 O80 20 

a Te 

@ FL£70 S 

v 

@o Ef 


- 


eF 400 19 — <8, (PAD ~<y S55 sr a oF 
. tae © r, 2 ~ , t ig fet GT) 
reve’? 


Of CP RNA it CE SG PUOaS Over O FNL SAG 
a read 
<i > 


if sureove 
at nemanbore= 
ya 
res be 
w 
395 ew 
993 11 
mies x 
&G 
TAT 
Pa 
WA 
B02, S.90 
BOL 
805 
80. 
80s. 
, oes. 


a= me ob 6 6 6 See. © 6 eee SS ee 


tLetmaed -anesilf yen: .ffea 


is 
IMNOMwOnm™ooOMVeove ec ooo Cc oo Ma AH eo oO rsa te 
ME EO 4 NOS OS SEN .O°6 50 + MG St EoD we me. Cec 

> = » * 2 * . > o @ ee a « ¢ o = @ ? 
i POL PIS ROS LAE OSS O- OS Bs DOAN ae NG ES. CN CS 


phe! sort... 
oe 
i 
> f 


TE a 
foiifhi.s sirifst 


eTAd OT COOHETA 


een 


.o Od¢ 
08.00 0840649 


Loves e, 


ee 


TAX HISTORY FOR STATE PURPOSES SINCE STATEHOOD TO DATE 


No, 
Year Pub- Uni- Bell. Cheney Ellens- Cent- Cap- Total we is 
Lev- Gen. Mili- Bond lic Perm. ver- Col- Nor- Nor=- burg ralia itol Reclam. Millis Lev- 
ied Assessed Value Fund tery Int. School lgwy. Hewy. sity lege mal mal Normal Normal Bldgs. Revolv. Bonus Levied Total State Tax ies Where Found 
1889 $ Ted bent ee «80 Ze50) Oe: G. 2.62 $ 327,945.99 2 Aud. 1889 Pg.91 
1890 = 201, 448, 136.00 3.01 0.20 0.10 3.31 66,793.34 3 Computed 
1891 278,882,450.00 3.00 0.20 0.025 3.225 899, 395.90 5 " 
1892 248,804,810.00 2.50 0.20 0.025 2.725 677,993.11 3 « 
1893 Powe elee 2.00 2.95 0.20 0.05 3.20 905,952.51 3 Equal.1893 Pg.2 
1894 226,245,182.00 2.87 0.20 0.05 Fed 705,431.30 3 © “18948 3 
1895 rae age da 3.00 0.20 0.20 3.16 56 1, 340,846.14 4 © 18959 w 
1896 204,677,668.00 3.06 0.20 0.20 3.21 6.67 1, 363,966.06 4 © 1896" 3 
189 226,130,784.00 2.60 0.20 0.20 2.70 5.70 1, 288,945.31 4 © e978 
186 226,996,294.00 2.40 0.20 0.20 2.60 5.40 1,225,776.51 4 © 1898 Sch.D 
1899  229,137,539.00 2.50 0.20 0.20 3.28 6.65 1,523,739.00 4 " 1899 Fe+34 
1900 2 7, 516, 523.00 2.20 0.20 0.20 3,80 6.40 1,520,471.00 4 ®" 1900" 66 
1901 0,120,734.00 2.20 0.20 0.20 5.00 7.60 1,977,366.00 4 © 1901 * = 
1902 260,940,138.00 2.20 0.20 0.20 5,00 7.60 » 983,146.00 4 © 1902" Ge 
1903 276,988, 569.00 2.50 0.10 5.00 7.60 2,105,116.00 3 * 1903" 40 
1904 298,460,979.00 2.50 0.10 5.00 7.60 2,268,298.00 3 * 1904" 52, 
1905 328, ha heen 2.50 0.10 5.00 7.60 2,496,922.00 3 * 19054 og 
1906 530,209,882.00 1.80 0.10 9:25 0.25 5.40 2,863,132.00 4 * 190 : 
190 apa One pes -80 3.00 0.20 3.00 0.50 be 3,839, 576.00 4 * 190 54 
190 745, 593, 942.00 1.60 0,20 2.50 0,50 4.80  3,593,250.00 :! oe : 44 
1909 790, 419,826.00 3.00 0.20 2.50 1.00 6.70 5,295,812.00 4 1909 58 
1910 906, 247,944.00 2.10 0.15 2.18 1.00 5.43 4,920, 926.00 4 © “T1gte 4 as 
1911 955,825,934.00 2.10 0.20 2.00 1.00 He 5, 062,167.00 a. 1S; See 
1912 1,005,086, 251.00 1-23 0.11 1.90 0.501.00 0.475 0.325 0.09 0.09 0,07 3° 9 ,819,449.00 10 : 1912 : 9 
1913 1,014, 475,027.00 3.00 0.11 1.90 1.25 1.50 0.475 0.325 0.09 0.09 0.07 81 937,525.00 10 1913 : 94 
1914 1,031, 901, 697 .00 2.45 0.11 1.96 1.00 1.50 8-4he 0.382 0.09 0.09 etd 8.07 8 ein ae 200 10" 8) 18Ta 
1915 1,031, 277,499.00 1.25 0.20 2.00 1,001.50 0.475 0.325 0.09 0.09 0.0 7.0 7,218,942.00 10 : 1915 : 
1916 987; 3 9,608 00 1.85 0.20 2.10 1,001.50 0.475 0.325 0.09 0.09 0.07 5-28 isttarerene 1 3 1916 ° 8 
1917 1,000, 082,749.00 1437 0.30 2.10 1.001.50 0.74 0.45 0.152 0.13 0.108 0.50 83 » 330,689.00 11 1917 : 80 
1918 1,035,938, 644.00 1.80 0.30 2.24 1.001.50 0.74 0.45 0.152 0.13 0.108 0.50 8.92 9,240,573.00 11 " 1918 rs 8 
1919 1,060, 620,838.00 3.00 0.30 2.06 1.001.50 0.74 0.45 0.152 0.13 0.108 0.50 0.50 10.44 11,072,882.00 12 " 1919 : 0 
1920 1,193, 923,659.00 4.50 0.30 4.80 1.001.50 0.74 0.45 0.152 0.1 0.108 0.50 0.50 14.68 17,526,799.00 12 " 1920 80 
1921 1,177,239, 240.00 2.25 0.20 Fast 1.C0.1.50 1310 6.67 O20 OL259 0.22 6.10 0.50 0.50 1.00 14.639 17,233,605.23 14 Computed 


Garfield 
Grant 
Grays Har 
Island 
Jefferson > 
King 
Kitsap 
Kittitas 


stevens 
Thurston 
Wahkiakum 
Walla Wal 
Whatcom 
whitman 
Yakima 


eee: “ae - 
ye Boro ir q Tee a ie 


“90,004 ,805) > 0; * 909 000 26 12 £06 
4, 0@®,000 ,¢¢74 ye es a i iQ £00 
00,0%¢, Tie? 88: 990, 0,000.0 oe 
q 4 4 . _ 09 69% .f 
2. 0006 Se eB 6 aes, ey e08 yif 

) Ake. ORE ve 

Q, * aeeeo s 28 180: a, sa as ig ss ‘ShS BOL 00;RS) 
3, af = 
100. © nee 345 868 ‘i 3. a1 tee ef 

' 4 oC £ 

L COG ANS SOPt! GAP SR 2 252 GOS a 
L, OO WSL Od FO, 90-68 3 ps re ns ie 
01,600 ,00¢~", “Od Gr. 0d," ° ef 
00, 00¢ .£ 29:0: “Od, BRR Le © 0. 
06,085 08 f°: ‘go! Ode 0.8 
O0,.0F@ (ORE 00; 0 OOO .S 
00,000 ,00 +" 3: OO dt -,S 
00.000 ,000%F? ‘00: a 
007 06%,08 3° Be Od if .S 

Ss 5 © 

"00,880 "Send %,1 B49 


00.900 oan es 00.9 
4888 (2».00,08% 0de+ 


qa iiiibe nc 1ss..086:96 W837 bias? eca. are 00288: 


U. S. GOVERNMENT STATE COUNTY PORT CITY & TOWN CHURCH & HOSP. SCHOOL CEMETERIES HEADS OF FAM, TOTAL 
Adams 82,130.00 184,800.00 145,699.00 148, 300.00 42,250.00 348,725.00 4,500.00 175,800.00 1,132.2 
Asotin 26, 500.00 4, 980.00 6,950.00 157,630.00 1,880.00 3bs" 000.00 “4 ogee 
Benton 20, 500.00 60,250.00 118,280.00 21, 200.00 85,000.00 550,000.00 7,400.00 440,780.00 1, 303,410.00 
Chelan 44,820.00 3,770.00 75,010.00 153,110.00 133,990.00 332,270.00 83.00 437,810.00 1,180,863.00 
Clallam 4, 287,740.00 961,300.00 120,000.00 60,195.00 0, 000.00 305,125.00 4,000.00 398,000.00 6,166, 360.00 
Clark 2,595, 528.00 200,000.00 300,000.00 275, 000,00 150, 000,00 568,000.00 1,504,028.00 125,000.00 2,250,000.00 7, 967,556.00 
Columbia 100,900.00 7,000.00 30, 900.00 200, 000.00 1,200.00 339,750.00 677, 950.00 
Cowlitz 538,160.00 2, 315,860.00 76,400 .00 60,000.00 58,500.00 319,770.00 4,000.00 500,000.00 3,872,690.00 
Douglas 4,500.00 35,670.00 67, §32.00 224, 334.00 68,500.00 2,780,410.00 2,125.00 528, 334.00 4,511,555.00 
Ferry 74, 600,00 450.00 10, 000.00 111, 500.00 500.00 192, 300.00 389, 350.00 
Franklin 465, 550.00 298,730.00 229,930.00 35, 600.00 70,760.00 208, 400.00 1,500.00 263,930.00 1,574,400.00 
Garfield 47,396.00 288,630.00 375,526.00 156, 080.00 33,000.00 4,000.00 740,806.00 1,645,938.00 
Grant 1,000,000,.00 179, 520.00 0, 000,00 25,000.00 311,950.00 423,935.00 2,020,405.00 
Grays Harbor (No other report received) 15,000.00 768, 300.00 783, 300.00 
Island 12,000.00 500,00 4,000.00 89, 325.00 2,000.00 18, 615.00 126, 440,00 
Jefferson 50,000,000.00 4,500,000.00 250,000.00 350, 900.00 70,000.00 290,900.00 10,000.00 270,000.00 55,740,000.00 
King 4,075,060.00 2,504, 660.00 4,620,000.00 9,218,025.00 108, 442,551.00 8, 268,230.00 18,259,024.00 560,000.00 18,600,000.00 174,547, 550.00 
Kitsap 800, 425.00 249, 364.00 55,000.00 346,000.00 144, 000.00 247,192.00 , 000,00 232,650.00 2,077,631.00 
eee tites 1,878,770.00 874,405.00 263,975.00 967,614.00 237,440.00 594, 331,00 » 470,00 834,800.00 5,659,805.00 
ewis 

Lincoln 79, 346.00 10,000.00 5,796.00 5,583.00 602,275.00 1,000.00 647,640.00 1, 351,640.00 
Mason 3, 000, 000.00 10, 000 .00 33, 345.00 4,000.00 1,130.00 166,015.00 1,000.00 205, 362.00 3.438, 675 ee 
Okanogan 5,837, 660.00 241,940.00 102,680.00 95,000.00 0,100.00 300,000.00 1, 500.00 ,250.00 7,087,130.00 
Pacific 392,785.00 2,632,705.00 98, 585 .00 15,540.00 pies 2735 00.00 1,850.00 400, 000.00 » 804, 513.00 
Pend Oreille (Does not know) 77,140 .00 , 680.00 28,860.00 180, 650.00 540.00 289,140.00 593, 010.00 
Pierce 389, 550.00 84,355.00 264,025.00 1,618,113.00 640,505.00 1,299,660.00 1,640,910.00 69,445.00 2,406,415.00 8,412,978.00 
San Juan 120, 000.00 20, 000.00 47,850.00 1, 000.00 10, 000.00 60,000.00 163, 470.00 422, 320.00 
Skagit 2,250,000,00 2,000,000.00 120,000.00 420,425.00 600,000.00 1,000,000.00 35,000.00 1,500,000.00 7,925,425.00 
skamania 66,700.00 2,000.00 15,000.00 80, 900.00 2,900.00 po 00 .00 202,000.00 
Snohomish 63, 400.00 34}: 222-08 282,128.00 2,050.00 127, 760.00 214,805.00 641, 695.00 15,685.00 1, 365,645.00  3,056,193.00 
spokane 230, 335.00 167,415.00 272,470.00 : 1, 028,635.00 2,008,055.00 2,505,000.00 6,160.00 7,240,160.00 13,458, 230.00 
stevens 71, 550 .00 429, 984.00 949,190.00 1,450,724.00 
Thurston 125,000.00 3,500, 00C.00 40, 000,00 150, 000.00 100, 000.00 375,000.00 13,400.00 ©.290,100,00 4,593,500.00 
Wahkiakum » 100.00 210, 000,00 25,000.00 1, 500,00 2,000,00 20,000.00 800,00 2,990.00 60, 990.00 
Walla Walla 990° Seb oo 576,000.00 480, 630.00 490, 000.00 570,000.00 ee ary 0,000.00 .,988,500.00 4,849,945.00 

tcom 5,000.00 499, 498.00 69,850.00 1, 683, 983.00 573,890.00 1,149,185.00 5,000.00 2, OO)» 44.00 7,080, 350.00 
Whitman 20, 000.00 950,000.00 250,000.00 150, 000.00 650,000.00 1,200, 000.00 7,210.00 778,000.00 4,005,210.00 
Yakima 1.125, 340,00 90,000.00 275,000,00, 394, 760,00 560,450,00 1,888,750.00 ,102, 000,00 015, 000,00 451, 300.00 


PROPERTY EXEMPT FROM TAXATION 
IN VARIOUS COUNTIES. 


80, 414,060.00 24, 602,577.00 9,677, 025.00 11,128,188 .00 116,435, 348.00 16,591,901.00 40, 253,794.00 1,142, 248,00 51,150,936.00 351, 396,677.00 


’ g *ee See e 00, ga 


tha 9858 


ee «Sc é 
ab. a ANE, 


00.056 .¥ 
00. ode 000 .f 
00.2 


90. gcE0 1 - 


a2. 258. ef, t 


. «®& NS lk 
ay vee v1 “ 


00,.Se¢S ,0fe.f 

00. ddd 200 .L 
00. 02 .VS0 
00. {Se ,.SS0,S 
00,222 .$d0.S 
00.£i5,€T0.S 
00. afl. Bok iS 
00.£€02 ,OSE .S 
00.°9 ‘36 ‘s 


00, & ,0€ a 


Bole 
ee? 


Public Permanent Bellingham 


° General ilitar, Interest School Highwa: Highwa: Universit College _— Normal Cheney Ellensburg cap Bldg. per Ountzniis gcipions - 
1889 Auditor pg.91 1889 $ 312, oe 6 $ 15,0 3.03 

1890 Equal. tk 1a 206 8:89 289.63 $20,144,682 ry H, 945.99 
that) 17 1 B36, 7135 55°776.43 6,972.06 ok 
B92 * 622,012.03 49,760.96 6, 220.12 999. 93.30 
1893" "35 ieee 835,175.00 56,622.01 14,155.50 905, 952.51 
1894 =" " 37 1894 » 870. 45,249.04 11,312.26 ‘ 905, 992.52 
1895 9" "17 1895 612,570.00 40,838.07 40,838.07 $ 646,600.00 1, jeer aa6si8 
1896 # " 33 1896 626, 615 .00 40, 935.5. 40,935.53 655, 480,00 bat) eee: 
18 * «7 18 587, 940.00 45, 226.1 45,226.15 610, 553.00 1: 383° 36 86 

18 " 8ch.D 1396 544,789.00 420 999-26 45,399.25 90,189.00 tba5 ore, 

1899 " pg.34 1899 572,829.00 45,624.00 45,824.00 59, 262.00 Heo bp 
1900 * © 66 1900 522,662.00 47,512.00 47,512.00 902,785.90 - 2a 4 
1901 « © 32 1901 572,400.00 52,032.00 52, 1032. .00 =1, 300, 902,00 Pee atte 
1992 "=O «56. 1902 574,067.00 52,189.00 52,189.00 1, 304,701.00 1, 983,146.00 
1903 « © 40 1903 692,471.00 27,700.00 1, 384, 945.00 et of! 116.00 
1904 " " 52 1904 746,152 .00 29,845.00 1,492, 302,00 2, 268, 298.00 
190 o «66 190 21, 356.00 32,854.00 1, 642,712.00 21496, 35°00 
190 " " 56190 954, 379.00 53,019.00 a 723,181.00 §$ ree 55 ae 2,8 32 2.00 
190 * 8 64 190' 1,719, 210.00 114, 620.00 19, 210,00 "330, 576.00 
1306 » 8 44 190 1,197,750.00 149,720.00 u 71, 484.00 374, 236: 00 "593" 340200 
1909 * " 58 1909 2, 371,259.00 158, 084.00 1, 976,049.00 790,420.00 3’ 398,812.00 
a eam ee 131b'saprc0 Bas" dsetoe £320,980. 

. © , 005,764. , 025. 910, 252. 5 

iste . ow a i912 2 29t! bse 00 1707 559.00 1,909, 664.00 3b, 543,00 $1, 00%. 086.00 $ a7 abe 00 $ 326,653.00 $ 90, pe ae $ 30, 458.00 $70, 356.00 "B19, 449. 
| 1913" "941913 3,043,425.00 111,592.00 1, 927,503.00 1,268,094,00 1,521,712.00 00 = 329,704.00 91, Ss Bh, 303-00 -00 71,013.00 ’ 3732 +00 
| 1914 " * 90 1914 2, 528,159.00 113, 510,00 2,022,527.00 1,031,899,00 1, 547,849.00 38 mite 00 335, 367.00 92, 878. 72, 234.00 8) 3 pa *00 
191 " 9 98 191 1, 289, 097 .00 206, 256.00 2,062, 555.00 1, O32, 277 -00 1, 546,916.00 489,857.00 3330483: 00 23 $30: a 3.8 tals. re 72" 189.00 7) 316, 942.00 
191 s 4 i316 1,826,578.00 197,468.00 2, 073,413.00 987,340.00 1,481,009.00 986.00 0, 885.00 861.00 Seles 602, 515.00 
191' « * 80 191) 1, 350, 112,00 300,025.00 2,100,174.00 1,000,083.00 1,500,124.00 a 061.00 450,037.00 152,012.00 130, 011.00 108,009.00 §$ 500,041.00 "3307 439.00 
191. s © 78 19 1824" 689.00 310,782.00 2, 320, 503.00 1,035,939.00 1, 553, 908 .00 un 6, 897 « .00 466,172.00 157,463.00 434) A. 672. .00 111,881.00 517,969.00 % aha -ee 
1919 » 8 bo 1919 3, 181, 863.00 38, 186.00 2,08eae2- 00 aan ese oe 1330) 8 be 4 hee 503: 20 pag a » 131, 878. p= 137.8 1 -00 14, 347. 90 530, 310. 90 $ 530, 10. F 11, 972,883.00 

* 8 2,656. 177.00 1 730,834.00 . ’ . 2 210.00 1 0 0 . 1 526,799. 
17, computed Bue 708.29 3451 447-85 $2 7201834.00 | 14193+92400 1+7200BEe Oe a 29er genie 286750129 2551447.85 _$A2tERl "on tariOeB-m  SRBLoLa.ee _ S80se03.62 $117,723.92 $1,277,230,26 _17.233,005.23 
1,201, 266.04 959,555.71 2,733,901.71 2,715,891.62 117,723.92 1,177,239.24 150,163, 393.40 


yf + 
(ty 
Vig 
y 
4 ) 
* ty 
Le fae. ex 
) a rl 
\ ‘S 
6 
WL) ‘ b 4 
¢ “Y) ae 
hi Oh. a See 


Ge 


ea 2. AV 


ae 


ae per ee ae 


fd 


ae 
Lam 


es oe ne, 
ae “ha - 
eo a ee poe 


ae 


S346 


- See = 
Pe Se = Fa 


i er 


4 
4 


~ 


I 


0 


000 779 


aa 
SSE 


Ses 


